ARKADIA CAPITAL CORP. AND ALPHADELTA MANAGEMENT CORP. ANNOUNCE PROPOSED QUALIFYING TRANSACTION
THIS PRESS RELEASE DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION, OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF THAT JURISDICTION.CALGARY, Alberta and VANCOUVER, British Columbia, March 12, 2020 (GLOBE NEWSWIRE) — Arkadia Capital Corp. (TSXV:AKC.H, “Arkadia”) and AlphaDelta Management Corp. (“ADM”) are pleased to announce that they have entered into a non-binding letter of intent dated March 10, 2020 (the “Letter of Intent”), that sets out the terms under which Arkadia would be prepared to acquire all of the issued and outstanding securities of ADM (the “Proposed Transaction”).
Arkadia intends the Proposed Transaction to constitute its “Qualifying Transaction”, as defined by the policies of TSX Venture Exchange Inc. (the “Exchange”). After the completion of the Proposed Transaction, Arkadia expects to be classified as a “Tier 2” issuer in the “Industrial” industry segment of the Exchange and carry on the business of ADM.ADMAlphaDelta Management Corp. is a creator, marketer and promoter of actively-managed investment funds and other investment products which are sold to Canadian investors through the broker-dealer distribution channel. The AlphaDelta Funds are distinguished by their fulfilling of un-met client needs and their high degree of differentiation from index and closet-index funds. All of the AlphaDelta Funds have, at one time or another, been at or near the top of their respective investment categories over their five-year performance history.ADM was incorporated under the federal laws of Canada in Vancouver, British Columbia on May 4, 2014, and carries on the business of distribution of financial investment products through IIROC and MFDA financial advisors throughout Canada.ADM has 34,849,866 common shares issued and outstanding (the “ADM Shares”). The directors of ADM are Maurice Levesque of Edmonton, Alberta; Victor Therrien of Vancouver, British Columbia; Christopher Harrison of Surrey, British Columbia; and Peter Van Dyke of Vancouver, British Columbia. No individual or group of individuals acting in concert has beneficial ownership of, or control or direction over, directly or indirectly, more than 20% of the outstanding ADM Shares on a non-diluted or fully- diluted basis.ADM intends to disclose certain historical financial information in a subsequent press release.ArkadiaArkadia was incorporated under the laws of the Province of Alberta in July 2011, and is a CPC, as defined by the policies of the Exchange. It does not carry on any business other than the identification and evaluation of assets and businesses with a view to completing a Qualifying Transaction.Arkadia has 6,523,343 common shares issued and outstanding (the “Arkadia Shares”). No individual or group of individuals acting in concert has beneficial ownership of, or control or direction over, directly or indirectly, more than 20% of the outstanding Arkadia Shares.Certain historical financial information about Arkadia is available at www.sedar.com.Proposed TransactionThe Proposed Transaction involves several steps. Under the Proposed Transaction: (a) Arkadia will incorporate a wholly-owned subsidiary; (b) the wholly-owned subsidiary and ADM will amalgamate (the “Amalgamation”) and, pursuant to the Amalgamation, the ADM shareholders will receive Arkadia Shares in exchange for their ADM Shares, on the basis of the Exchange Ratio (as defined below); and (c) Arkadia will change its name to “AlphaDelta Financial Management Corp.” (the “Name Change”). In addition, Arkadia intends to consolidate the Arkadia Shares before or after the Proposed Transaction on not less than a 10:1 basis (the “Consolidation”).Private PlacementsShortly after the dissemination of this press release, ADM intends to conduct a private placement to accredited investors of a minimum of 5,000,000 ADM Shares and a maximum of 20,000,000 ADM Shares, at a price of $0.05 per ADM Share, for minimum gross proceeds of $250,000 and maximum gross proceeds of $1,000,000 (the “Pre-Closing Private Placement”). The proceeds of the Pre-Closing Private Placement will be used to advance a loan to Arkadia to pay expenses incurred by Arkadia in connection with the Proposed Transaction, pay expenses incurred by ADM in connection with the Proposed Transaction, and for general corporate purposes.Immediately prior to the completion of the Proposed Transaction, ADM expects to conduct a second private placement to accredited investors (the “Concurrent Private Placement” and, together with the Pre-Closing Private Placement, the “Private Placements”) of ADM Shares, at a price of $0.10 to $0.20 per ADM Share, for minimum gross proceeds of $500,000 and maximum gross proceeds of $3,000,000. The proceeds of the Concurrent Private Placement will be used for general corporate purposes.Conditions Precedent to ClosingThe Proposed Transaction is subject to a number of significant conditions, including that: (a) the Exchange has conditionally accepted the Proposed Transaction; (b) the Alberta Securities Commission has revoked the cease trade order against Arkadia for failure to file audited annual financial statements and management’s discussion and analysis for the financial year ended August 31, 2018; (c) ADM has closed the Pre-Closing Private Placement and satisfied all of the pre-closing conditions to the Concurrent Private Placement; (d) ADM shareholders have approved the Amalgamation; and (e) Arkadia shareholders have approved the Name Change. In addition, the Consolidation may require the approval of the Arkadia shareholders, or the ADM shareholders, or both.Post-Closing Capitalization of ArkadiaUnder the Proposed Transaction, the parties will establish the number of Arkadia Shares to be issued for each ADM Share based on the ratio determined by dividing the price per ADM Share under the Concurrent Private Placement by $0.008, being the deemed price of each Arkadia Share (the “Exchange Ratio”). The parties will also establish the exact terms of the Consolidation based on the requirements of the Exchange and advice from their professional advisors.Post-Closing Directors and OfficersImmediately after the Proposed Transaction, Arkadia expects its directors or officers to be as follows:Victor J Therrien, Chief Executive Officer, Chief Financial Officer, and Director. Victor was drawn to the financial services industry in 1988, and over the past 30 years served in the following executive roles; Vice- President, Director for AGF Management Ltd., an investment management firm, Executive Vice-President, Director (Canada), Executive Director / Global Institutional Group at Brandes Investment Partners Ltd., an investment management firm, President and CEO at Therrien Woods & Co., an investment management firm, Vice-President (Ontario) of Richardson GMP Limited, a wealth management firm, and CEO / Founder of ADM. As well, Victor serves on the board of directors of a publicly- traded company, a registered investment fund manager and two private companies. Victor has been on several executive committees, investment oversight committees and long-term strategic planning and product development committees. During his tenure, Victor has raised over $15 billion in assets while developing and launching over 30 mutual funds and investment unit trusts. Victor has current credentials to reside and work in Canada, the United States and European Union.Maurice Levesque, Director (Chair). Mr. Levesque is a founder, Chairman, and Chief Executive Officer of Qwest Investment Management Corp., an investment management firm (“QIM”). Mr. Levesque is the Chairman, UDP and Chief Compliance Officer of Qwest Investment Fund Management Ltd. (a subsidiary company of QIM). Mr. Levesque is the Chairman and President of Heritage Bancorp Ltd. (a wholly owned subsidiary of QIM). He is the Chairman, CEO and a director of Qwest Funds Corp. (a subsidiary company of QIM). Mr. Levesque has over 35 years of experience in the Canadian financial industry and is recognized for his broad knowledge, skills and experience in the venture capital industry, financial services industry and for his leadership skills in new business formation and development. Mr. Levesque is a founder and/or a director of several private and publicly traded companies which operate in a variety of industries. Mr. Levesque graduated from The Northern Alberta Institute of Technology with a diploma in Administration Management.Peter Van Dyke, Director. Mr. Van Dyke is a seasoned finance professional, having worked in the finance and investment industry for most of his 35-year career. He held positions in banking (Royal Bank: Administrative Management and Lloyds Bank: Commercial/Corporate Credit), real estate market analysis (CMHC), operational finance and investment (Deeley Harley-Davidson Canada) and for the last four years has been working in the family office space, managing the Deeley Group’s institutional-sized investment portfolio. Peter is a Director of Junior Achievement BC and Chair of its Risk Management Committee. He is also Director and Treasurer of the Vancouver Community College Foundation. Peter is a Chartered Professional Accountant (CPA, CMA), a graduate of Simon Fraser University (BBA – Finance), and University of British Columbia (Urban Land Economics Diploma). He has successfully completed the Canadian Securities Course and completed the first year of the CFA Institute’s Certificate in Investment Performance Measurement.Chris Harrison, Director. Mr. Harrison has over 23 years of experience as a senior finance professional in family offices and financial services firms. Chris is currently the CFO of Scott Capital Ltd., a Vancouver-based family office, with responsibility for overseeing all financial, tax, treasury, estate, insurance and risk management, and general business for the family owned companies, trusts and personal investments. Prior to joining Scott Capital Ltd., Chris was the Chief Operating Officer and Chief Financial Officer of QIM, an investment management firm, and was responsible for overseeing all aspects of operations, finance and tax reporting for all of the related QIM operating companies and investment funds. Prior to joining Qwest, Chris was Senior Manager of Administration and Controller for Genus Capital Management, a Vancouver based boutique investment management firm, and was responsible for all back-office operations, compliance, financial and regulatory reporting for the company and the Genus Group of Funds. Chris is the former Secretary and Treasurer of the Vancouver Chapter of the Private Capital Markets Association of Canada. Current and past board positions include ADM and the QIM operating companies and investment funds Qwest Energy Flow- Through 2015 Management Corp., Qwest 2015 Oil & Gas Flow-Through Management Corp., Qwest 2014 Oil & Gas Flow-Through Management Corp., Qwest 2013 Oil & Gas Flow-Through Management Corp., Qwest 2013 Oil & Gas Exploration and Development Flow-Through Management Corp., and Qwest Funds Corp. Chris is a Chartered Professional Accountant (CPA, CGA) and a graduate of the University of Victoria (B.A. Economics) and the British Columbia Institute of Technology (Diploma of Technology in Financial Management – Corporate Finance). Chris has also successfully completed the Canadian Securities Course and the Partners, Directors and Senior Officers Course.Glenn Warkentin, Director. Mr. Warkentin is counsel at Nerland Lindsey LLP, a law firm. For 30 years, he has worked with and been an advisor to closely-held corporations, public issuers, limited partnerships and trusts providing advice and direction regarding mergers and acquisitions, commercial real estate, credit facilities, corporate structure, corporate reorganizations, regulatory compliance and capital raising in a variety of industries. Mr. Warkentin is also corporate secretary for Qwest Investment Management Corp., an investment management firm, and Bluewater Acquisition Corp., a capital pool company. He holds a BA in Business Administration from Western Washington University, an LLB from the University of Alberta and is called to the bar in the Province of Alberta.Adam Rock, Director and Corporate Secretary. Mr. Rock is the Chief Executive Officer of Arkadia, and a partner at Nerland Lindsey LLP, a law firm, where he practices corporate law with a focus on securities and mergers and acquisitions. His clients include private corporations, public companies, and investments funds. Mr. Rock holds an LLB from the University of Toronto and is called to the bar in the Province of Alberta.Dr. John Schmitz, Director. Dr. Schmitz is one of Canada’s foremost authorities on global equities and global derivatives. He is responsible for risk management and chairs AlphaDelta’s Investment Oversight Committee for the AlphaDelta Funds. Dr. Schmitz holds a BESc (Mechanical Engineering), a BA (Economics) and a DHS (Honours Economics) from the University of Western Ontario, a MA (Economics) from the University of Toronto, and a PhD (Finance) from the Richard Ivey School of Business at the University of Western Ontario. He also holds the Chartered Financial Analyst (CFA) designation.Arm’s Length NegotiationsThe Non Arm’s Length Parties to Arkadia: (a) do not own any direct or indirect beneficial interest in ADM; (b) are not “Insiders”, as defined in the policies of the Exchange, of ADM; and (c) do not have any relationship with the Non Arm’s Length Parties to ADM. Furthermore, the Proposed Transaction does not constitute a “Non Arm’s Length Qualifying Transaction”, as defined in the policies of the Exchange, and Arkadia is not required, therefore, to obtain shareholder approval of the Proposed Transaction under the policies of the Exchange.SponsorshipIn connection with the Proposed Transaction, Arkadia intends to apply for a waiver of the sponsorship requirements of the Exchange. There can be no assurance that the Exchange will grant the waiver. If the Exchange does not grant the waiver, then Arkadia must retain a sponsor of the Proposed Transaction in accordance with the policies of the Exchange.Exchange AdvisoryCompletion of the Proposed Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to the requirements of the Exchange, majority of the minority shareholder approval. Where applicable, the Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.Investors are cautioned that, except as disclosed in the prospectus to be prepared in connection with the Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon.Trading in the securities of a CPC should be considered highly speculative.The Exchange 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 the Exchange nor its “regulation services provider” (as defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this press release.Forward-Looking Information DisclaimerThis press release contains forward-looking information within the meaning of applicable securities legislation. In general, forward-looking information refers to disclosure about future conditions, courses of action, and events. The use of any of the words “anticipates”, “expects”, “intends”, “will”, “would”, and similar expressions are intended to identify forward-looking information. More particularly and without limitation, this press release contains forward looking information concerning the proposed terms, and the anticipated results, of the Proposed Transaction, Pre-Closing Private Placement, and Concurrent Private Placement. The forward- looking information is based on certain key expectations and assumptions made by Arkadia and ADM, including expectations and assumptions concerning the ability of Arkadia and ADM to complete the Proposed Transaction, Pre-Closing Private Placement, and Concurrent Private Placement. Although Arkadia and ADM believe that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because neither Arkadia nor ADM can give any assurance that they will prove to be accurate. By its nature, forward-looking information is subject to various risks and uncertainties, which could cause the actual results and expectations to differ materially from the anticipated results or expectations expressed in this press release. These risks and uncertainties include, but are not limited to, the inability of Arkadia and ADM to satisfy the conditions precedent to the Proposed Transaction, Pre-Closing Private Placement, and Concurrent Private Placement. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date of this press release, and to not use such forward-looking information for anything other than its intended purpose.Neither Arkadia nor ADM undertakes any obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities legislation.Further InformationFor further information about Arkadia, please contact:For further information about ADM, please contact:Victor Therrien
CEO & Founder
+1 (778) 987-6417