Hopefield Ventures Enters Definitive Agreement with Cybercatch Holdings for Qualifying Transaction
VANCOUVER, BC – TheNewswire - December 9, 2022 – Hopefield Ventures Inc. (TSXV:HVI.P) (“Hopefield”) is pleased to announce that, further to its prior news release dated November 8, 2022, it has entered into an amalgamation agreement (the “Amalgamation Agreement”), dated effective December 8, 2022, with CyberCatch Holdings, Inc. (“CyberCatch”) and 1390090 B.C. Ltd. (“SubCo”), a wholly-owned subsidiary of Hopefield. Pursuant to the Amalgamation Agreement, Hopefield will, among other things, acquire all of the issued and outstanding securities of CyberCatch (the “Transaction”).
It is anticipated that the Transaction will constitute a reverse takeover and Hopefield’s “Qualifying Transaction” under Policy 2.4 – Capital Pool Companies of the Corporate Finance Manual of the TSX Venture Exchange (the “Exchange”).
Summary of the Transaction
Subject to approval by the Exchange, CyberCatch will amalgamate with SubCo in order to facilitate the completion of the Transaction. It is the intention of the parties that Hopefield, following the closing of the Transaction (then referred to as the “Resulting Issuer”), will be listed on the TSXV as a Tier 2 technology issuer, and that the business of the Resulting Issuer will be the business of CyberCatch.
In connection with completion of the Transaction, Hopefield will consolidate its common shares (the “Hopefield Shares”) on an approximate basis of 3.87:1 (the “Consolidation”), whereby each holder of Hopefield Shares will receive one post-Consolidation common share (a “Post-Consolidation Hopefield Share”) for each 3.87 Hopefield Shares held at the time of the Consolidation. Following the Consolidation, Hopefield will have approximately 10,000,000 Post-Consolidation Hopefield Shares issued and outstanding, as well as incentive stock options entitling the holders thereof to purchase an aggregate of 911,499 Post-Consolidation Hopefield Shares and broker warrants entitling the holder thereof to purchase 516,796 Post-Consolidation Hopefield Shares.
Under the terms of the Amalgamation Agreement, the Transaction will be completed by way of a three-cornered amalgamation pursuant to the provisions of the Business Corporations Act (British Columbia). Pursuant to the terms of the Amalgamation Agreement, SubCo and CyberCatch will amalgamate (the “Amalgamation”) and all of the issued and outstanding securities of CyberCatch, immediately following completion of the Consolidation will be exchanged for equivalent securities of Hopefield on a one-for-one basis.
Certain Post-Consolidation Hopefield Shares to be issued pursuant to the Transaction are expected to be subject to restrictions on resale or escrow under the policies of the Exchange, including the securities to be issued to principals (as defined under the Exchange policies), which will be subject to the escrow requirements of the Exchange.
It is anticipated that the Resulting Issuer will continue the business of CyberCatch under the name “CyberCatch Holdings, Inc.” (the “Name Change”) and CyberCatch will change its name to “CyberCatch Global, Inc.” The business of the Resulting Issuer will be primarily focused on providing a Software as a Service (“SaaS”) solution for continuous compliance, security and cyber risk mitigation.
Pursuant to the terms of the Amalgamation Agreement, Hopefield agreed to advance to CyberCatch $250,000 upon receipt of conditional approval from the Exchange for the completion of the Amalgamation and the listing and posting for trading on the Exchange of the shares of the Resulting Issuer issuable pursuant to the Amalgamation and the approval of the Exchange of such loan. The loan shall bear no interest and shall mature on February 28, 2023.
The Amalgamation Agreement includes a number of conditions precedent to the closing of the Transaction, including, but not limited to, receipt of the requisite shareholder approvals, completion of the Consolidation and the Name Change, approvals of all regulatory bodies having jurisdiction in connection with the Transaction, approval of the TSXV, including the satisfaction of its listing requirements, and the satisfaction of other closing conditions customary to transactions of this nature. There can be no assurance that the Transaction will be completed as proposed or at all. Following completion of the Transaction, CyberCatch will become a wholly-owned subsidiary of Hopefield, which will form the Resulting Issuer. The foregoing is a summary of the Amalgamation Agreement and is qualified in its entirety by the Amalgamation Agreement, a copy of which will be available under Hopefield’s profile on SEDAR at www.sedar.com.
In connection with the Transaction, Hopefield has entered into a finder’s fee agreement with Toro Pacific Management Inc. (the “Finder”), an entity controlled by Len Clough and an arm’s length party, for the Finder’s introduction of Hopefield to CyberCatch. Hopefield has agreed to issue the Finder 250,000 Post-Consolidation Hopefield Shares upon closing of the Transaction, subject to the approval by the Exchange.
It is expected that, upon completion of the Transaction, the Resulting Issuer will have approximately 52,571,000 shares issued and outstanding (each, a “Resulting Issuer Share”) on an undiluted basis. Upon completion of the Transaction, it is expected that: (i) the former shareholders of CyberCatch will hold approximately 80.5% of the Resulting Issuer Shares; (ii) the former shareholders of Hopefield will hold approximately 19.0% of the Resulting Issuer Shares; and (iii) the Finder will hold 0.5% of the Resulting Issuer Shares, on an undiluted basis. On a proforma basis, it is anticipated that the Resulting Issuer will have approximately $2.9 million in cash available upon the completion of the Transaction.
The Transaction does not constitute a “Non-Arm’s Length Qualifying Transaction”, as such term is defined in Policy 2.4 of the Exchange and consequently, the Transaction, as currently contemplated, will not be subject to approval by Hopefield’s shareholders.
Board of Directors and Management Changes
On completion of the Transaction, all of the directors and officers of Hopefield shall resign and shall each be replaced by the anticipated nominees of CyberCatch (as summarized below).
Directors and Officers of the Resulting Issuer
In conjunction with and upon closing of the Transaction, the board of directors of the Resulting Issuer is expected to consist of four directors and the management of the Resulting Issuer is expected to consist of five officers, all of whom will be nominated by CyberCatch. It is expected that two additional directors will be appointed at the Resulting Issuer’s next annual general meeting. The existing directors and officers of Hopefield will resign at or prior to closing of the Transaction. It is expected that at closing of the Transaction, the following individuals will be constitute the board and management of the Resulting Issuer:
Sai Huda, Chairman and Chief Executive Officer
Mr. Huda is the Chairman, Chief Executive Officer and Director of CyberCatch. He is a globally recognized risk and cybersecurity expert and is a former founder, Chairman and CEO, of Compliance Coach, an industry-leading compliance SaaS, provider, which was acquired by FIS (NYSE:FIS), a Fortune 500 company. Mr. Huda is author of the book, Next Level Cybersecurity. Mr. Huda is a former GM, Risk, Information Security and Compliance Solutions, to FIS, and led the business to attain a number one ranking in RiskTech 100. Mr. Huda obtained a Masters in Business Administration from the University of Maine with Beta Gamma Sigma Honors in 1984.
Gary Evans, Director
Mr. Evans is a Director of CyberCatch and he serves as the Chair of the Audit Committee. He is a former founder and CEO of Bank of Internet, and took the company public (NASDAQ: BofI), now renamed Axos (NYSE: AX). Bank of Internet was the first customer of Compliance Coach. Mr. Evans was the former President of La Jolla Bank. Mr. Evans obtained a Bachelor of Science in Business in 1971 and a Master of Science in Finance in 1973 from California State University.
Kay Nichols, Director
Ms. Nichols is a Director of CyberCatch and she serves as the Chair of the Strategy Committee. She is a former IBM Executive and board member of OnPay. Ms. Nichols is a former EVP, Global Financial Institutions, Mobile, E-Banking, Risk, Fraud and Compliance, FIS (NYSE:FIS), a Fortune 500 company. Ms. Nichols led the acquisition of Compliance Coach. Ms. Nichols obtained a Bachelor of Science from Bristol University in 1984, and obtained an MBA from the International Management Center, located in the United Kingdom, in 1987.
Pierre Soulard, Director
Mr. Soulard is a Director of CyberCatch and he serves as the Chair of the Nominating and Corporate Governance Committee. He is the Chief Legal Officer of CoinSmart (NEO: SMRT) and is a former Partner, at Miller Thomson, a leading Canadian law firm. Mr. Soulard’s legal practice focused on securities law, corporate finance, mergers and acquisitions, private placements, general corporate matters, and corporate governance. Mr. Soulard obtained a Bachelor of Arts from Laval University in 1990, a LLB from McGill University in 2014, and a Master of Law from Osgoode Hall Law School in 2009.
Darren Tindale, Chief Financial Officer and Corporate Secretary
Mr. Tindale is the Chief Financial Officer of CyberCatch. He brings over 20 years of financial accounting and management experience and has worked for both public and private companies. Mr. Tindale has served as CFO for numerous TSX Venture and CSE-listed companies and previously served as the CFO or Body and Mind Inc. from March 2017 to August 2019 and Whatcom Capital Corp., which merged with NEXE Innovations (TSXV:NEXE) in its qualifying transaction. Mr. Tindale currently provides consulting services to numerous publicly-listed companies for financial, regulatory and accounting services.
Katherine Atmar, Chief Marketing Officer
Ms. Atmar is the Chief Marketing Officer of CyberCatch. She is a former Creative Director, Art Director, Lead Designer and Branding and Design Specialist, Electronic Arts and WPP Agency, with Fortune 500 clients in various sectors. Ms. Atmar obtained a Bachelor of Arts from University of May Hardin-Baylor in 2014 and a Master of Arts from the University of Texas in 2016.
Andrew Kim, Chief Information Security Officer
Mr. Kim is the Chief Information Security Officer of CyberCatch. He is the former CISO at Allstate, one of the largest insurance companies in North America and a former Head of Cybersecurity Consulting Practice, Risk, Information Security and Compliance Solutions, FIS (NYSE: FIS), a Fortune 500 company. He is also former Cybersecurity Leader at Citigroup. Mr. Kim obtained a Bachelor of Arts from Whinberg University in 1992. Mr. Kim holds multiple cybersecurity certifications, including Certified Information Systems Auditor (CISA), Certified Information Systems Security Professional (CISSP), Certified Information Security Manager (CISM), Certified in Governance of Enterprise IT (CGEIT) and Certified Data Privacy Solutions Engineer (CDPSE).
Bryan Rho, Chief Technology Officer
Mr. Rho is the Chief Technology Officer of CyberCatch. He is former Head of Compliance Technology Products, Risk, Information Security and Compliance Solutions, FIS (NYSE: FIS), Fortune 500 company, former Head of Products, Compliance Coach, industry-leading SaaS provider and a licensed attorney in the State of California. Mr. Rho obtained a bachelor of Arts from the University of Hawaii in 1996 and Juris Doctorate from California Western School of Law in 2000.
In connection with the Transaction and pursuant to the requirements of the Exchange, Hopefield intends on filing a filing statement on its issuer profile on SEDAR (www.sedar.com), which will contain relevant details regarding the Transaction, Hopefield, CyberCatch and the Resulting Issuer.
Additional terms regarding the Transaction were previously disclosed in the news releases of Hopefield dated November 8, 2022, which is available under Hopefield’s SEDAR profile at www.sedar.com.
Trading in the common shares of Hopefield has been halted, and will remain halted, pending the satisfaction of all applicable requirements of Policy 2.4 of the Exchange. There can be no assurance that trading of common shares of Hopefield will resume prior to the completion of the Transaction.
CyberCatch is a private company incorporated pursuant to the Business Corporations Act (British Columbia) on January 22, 2021 under the name “Cycap Technologies Ltd.” On September 10, 2021, CyberCatch acquired all the issued and outstanding common stock of shares of CyberCatch Inc. (“CyberCatch Subco”) a company incorporated pursuant to the laws of the State of Delaware (the “CyberCatch Acquisition”). Following the CyberCatch Acquisition, the business of CyberCatch became that of its operational subsidiary, CyberCatch Subco. CyberCatch provides a SaaS solution to small and medium-sized organizations (“SMOs”) in Canada and the United States. The SaaS solution enables continuous compliance with cybersecurity mandates and cyber risk mitigation via automated benchmarking and testing of cyber security controls to detect and remediate security weaknesses to prevent data thefts and ransomware attacks.
CyberCatch has obtained a patent from the United States Patent and Trademark Office and specializes in serving SMOs in the United States and Canada. The cloud-native platform solution developed by CyberCatch first helps an SMO implement a baseline of cybersecurity controls in accordance with a regulation, standard or framework, then automatically and continuously tests the controls to identify control deficiencies and non-compliance with cybersecurity requirements, so the SMO can take prompt action to remediate the control deficiency, regain compliance with cybersecurity requirements and avoid creating a security weakness that an attacker can exploit to commit a data theft or ransomware attack.
Select Financial Information
The following table sets out selected audited financial information with respect to CyberCatch for the nine-months April 30, 2022. CyberCatch’s financial statements are prepared in accordance with the International Financial Reporting Standards, issued by the International Accounting Standards Board, and are denominated in Canadian dollars. CyberCatch and its auditors are currently in the process of preparing updated audited financial statements for the fiscal year ended July 31, 2022, at which time such revised audited financial information will be disclosed.
As at April 30, 2022
Net Profit (Loss)
Hopefield is a “capital pool company” within the meaning of the policies of the Exchange that has not commenced commercial operations and has no assets other than cash. The board of directors of Hopefield currently consists of Messrs. Mark Binns, Mark Healy and Chris Donaldson.
The officers of Hopefield are currently Mark Binns, Chief Executive Officer, and Zula Kropivnitski, Chief Financial Officer and Corporate Secretary. Except as specifically contemplated in the Exchange’s CPC policy, until the completion of its Qualifying Transaction (as defined under the policies of the Exchange), Hopefield will not carry on business, other than the identification and evaluation of companies, business or assets with a view to completing a proposed Qualifying Transaction.
For further information, please contact:
Mark Binns, Chief Executive Officer
Telephone: (604) 681-0084
Completion of the Transaction 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 Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction 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 Transaction, any information released or received with respect to the Transaction 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 TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This press release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
Forward Looking Information
This news release may contain certain “Forward-Looking Statements” as defined under applicable Canadian securities laws. When or if used in this news release, the words “anticipate”, “believe”, “estimate”, “expect”, “target”, “plan”, “forecast”, “may”, “schedule” and similar words or expressions identify forward-looking statements or information. These forward-looking statements or information may relate to: the timing of the Transaction; statements concerning the Resulting Issuer following completion of the Transaction (including composition of the board of directors and management team); completion of the Transaction; and expectations for other economic, business, and/or competitive factors.
Forward-looking information is based upon certain material assumptions that were applied in drawing a conclusion or making a forecast or projection, including management’s perceptions of historical trends, current conditions and expected future developments, as well as other considerations that are believed to be appropriate in the circumstances. While management of Hopefield considers these assumptions to be reasonable based on information currently available, there is no assurance that such expectations will prove to be correct. By its nature, forward-looking information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking information include: the ability to consummate the Transaction; the ability to obtain requisite regulatory and security holder approvals and to satisfy other conditions to the consummation of the Transaction on the terms and at the times proposed; the impact of the announcement or consummation of the Transaction on relationships; changes in general economic, business and political conditions, including changes in the financial markets; changes in applicable laws; changes in government regulation and regulatory compliance; and the diversion of management time on the Transaction. Should one or more of these risks, uncertainties or other factors materialize, or should assumptions underlying the forward-looking information or statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Readers are cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking information.
The forward-looking information contained in this news release is stated as of the date of this news release. Hopefield does not intend, and does not assume any obligation, to update these forward-looking statements or information to reflect changes in assumptions or changes in circumstances or any other events affecting such statements and information other than as required by applicable laws, rules and regulations.