Toronto, Ontario (January 28, 2015) – Loma Vista Capital Inc. (“Loma Vista” or the “Company”) (CSE: LOV) is pleased to announce that it has entered into a binding letter of intent for a business combination agreement with BitGold Inc. (“BitGold”) which will result in a reverse take-over.
BitGold is a development stage internet technology and money service business. BitGold’s mission is to provide global access to gold for secure savings and transactions, making an extraordinary element useful and empowering again. BitGold is advancing the digital payments revolution by helping global clients acquire, store, and now spend gold with unprecedented simplicity. Through the use of its proprietary software technology, the BitGold operating platform provides innovative solutions to the challenge of transacting globally with fully allocated, redeemable and securely vaulted gold.
Sprott Inc., a leading alternative asset manager, has commenced discussions with BitGold to assess the potential business opportunities and commercial feasibility of establishing a strategic relationship. Sprott and its affiliates have assets under management of over $7 billion, and is one of the world’s foremost gold and gold investment managers. Sprott believes that its clients and other gold investors will benefit from access to a secure, internet-based platform which facilitates the use of gold as a payment option. In addition, Sprott Inc. has committed to invest in BitGold as described below.
Pursuant to the business combination, Loma Vista will amalgamate with BitGold to form a corporation to continue under the name, BitGold Inc. (the “Business Combination”). Following completion of the Business Combination, the amalgamated company (“Amalco”) will hold all of BitGold’s assets and conduct the business of BitGold.
Pursuant to the Business Combination, approximately 16.5 shares of Loma Vista will be exchanged for one common share of Amalco, and one share of BitGold will be exchanged for one common share of Amalco. As at January 28, 2015, there were 9,158,667 Loma Vista common shares issued and outstanding and 27,292,500 BitGold shares outstanding.
As a result of the Business Combination, including the private placement discussed below, the Company expects to have approximately 34,514,723 issued and outstanding common shares on an undiluted basis. Approximately 1.6% of those shares will be held by shareholders of Loma Vista, and 79.0% will be held by former shareholders of BitGold, with the remaining 19.4% held by the private placement investors.
In conjunction with the business combination, BitGold expects to complete a brokered private placement (the “Financing”) through a syndicate of agents co-led by Dundee Securities Ltd. and Clarus Securities Inc., and including GMP Securities L.P. and Canaccord Genuity Corp. (the “Agents”) to raise gross proceeds of approximately $6,000,000 through the issuance of subscription receipts (“Subscription Receipts”) at a price of $0.90 per Subscription Receipt. Upon satisfaction of the escrow release conditions, including all conditions precedent to the Business Combination being satisfied, each Subscription Receipt will automatically convert without any further action on the part of the holder into one BitGold unit (a “Unit”) immediately prior to completion of the Business Combination. Provided that, if the escrow release conditions are not satisfied on or before April 27, 2015, the Subscription Receipts will be cancelled and all proceeds from the sale of Subscription Receipts will be returned to the subscribers.
Each Unit will be comprised of one BitGold Share and one half of one warrant, with each whole warrant (a “BitGold Warrant”) entitling the holder thereof to acquire one BitGold Share at a price of $1.35 for a period of 18 months after issuance, subject to acceleration by BitGold if the volume-weighted average price of the BitGold Shares on the principal stock exchange upon which they are listed exceeds $2.00 for a period of 20 consecutive days. Pursuant to the Business Combination, each BitGold Unit will be exchanged for one unit of Loma Vista on a post-consolidation basis.
BitGold has obtained a lead order from Sprott Inc. and certain of its directors who intend to subscribe for an aggregate of 2,222,222 Subscription Receipts for an aggregate purchase price of $2,000,000. BitGold Inc. and Sprott Inc. are discussing potential strategic relationship as discussed above. In addition, Roy Sebag and his designees will subscribe for 1,111,111 Subscription Receipts for an aggregate purchase price of $1,000,000.
Net proceeds of the Financing will be used by the Company to execute BitGold’s marketing and customer acquisition strategy through a variety of online and offline channels, to further develop BitGold’s software technology and intellectual property portfolio, and for general working capital purposes.
In connection with the Financing, the Agents will be entitled to a cash commission equal to 6% of the aggregate gross proceeds raised, and broker warrants exercisable for Units equal to 6% of the number of Subscription Receipts issued. Pursuant to the Business Combination, each one broker warrant issued pursuant to the Financing will be exchanged for one broker warrant of the Company.
Roy Sebag, President, Chief Executive Officer and Director
Roy Sebag, President, Chief Executive Officer and director, is a co-founder of BitGold Inc. and has served as its Chief Executive since 2014. Roy also serves as the Founder and Managing Principal of Braavos Capital, Ltd. an international private investment organization engaged in value-oriented investments across a variety of asset classes and industries. From 2004 through to 2010 Mr. Sebag was the Founder and Portfolio Manager of Essentia Equity, Ltd., an investment partnership that engaged in fundamental long and short equity investing in distressed, eventdriven, and natural resource related opportunities. He is also the Founder, Chairman and Chief Executive Officer of Natural Resource Holdings, Ltd., an investment company engaged in the acquisition, development and ownership of natural resource assets in North America. Mr. Sebag is also the President, Chief Executive Officer, and a director of Loma Vista.
Joshua Crumb, Chief Operating Officer and Director
Joshua Crumb, Chief Strategy Officer and director, is a co-founder of BitGold Inc. and has served as a director since 2014. Josh is an entrepreneur with a background in early stage global businesses. Josh was previously the Senior Metals Strategist at Goldman Sachs in the Global Economics, Commodities and Strategies research division in London. Mr. Crumb also held various positions within the Lundin group of companies, serving as Director of Corporate Development at Lundin Mining Corp. and Special Project Analyst for group chairman Lukas Lundin, and is currently a director of Zazu Metals Corporation, Silver Bull Resources, Inc. and Loma Vista. Josh holds a Master of Science degree in Mineral Economics, a Graduate Certificate in International Political Economy, and Bachelor of Science degree in Engineering from the Colorado School of Mines.
Dennis H. Peterson, Director
Dennis H. Peterson, director, is a securities lawyer and the principal of Peterson & Company LLP, a Toronto-based securities law boutique. Mr. Peterson was called to the bar in Ontario in 1988. He has held senior positions with a variety of public companies, including Probe Mines Limited (Director), Zazu Metals Corporation (Director), and Canstar Resources Inc. (Director). Mr. Peterson holds a Bachelor of Commerce from Queen’s University, and a Bachelor of Law from the University of Toronto.
James Eaton, Director
James Eaton, director, is the President of Weatons Holdings, a Canadian private holding company. James has been active in the founding, growth and divestiture stages of the Weatons portfolio companies across a wide variety of industries. His responsibilities at Weatons include overseeing numerous private investments and a portfolio of listed securities. James serves on the boards of JC Clark, Defyrus, Dream Hard Asset Alternatives Trust, Syncordia Technologies and Healthcare Solutions and Ceviche. James also serves on the boards of the Canadian Art Foundation, the True Patriot Love Foundation, and is a trustee of the John David and Signy Eaton Foundation. Mr. Eaton holds a Bachelor of Arts from the University of Colorado at Boulder.
Alessandro Premoli, Chief Technology Officer
Alessandro Premoli, Chief Technology Officer, is a security cryptographer and software engineer. Over the last decade, he has developed encrypted storage and messaging systems for highlysensitive, data-intensive organizations. Mr. Premoli has served as Chief Technology Officer of Andxor S.R.L., a company specializing in image, data, and application security, and as a developer at C&A S.R.L., a company specializing in cryptography. Mr. Premoli also served as an independent security consultant to OpenCoin Inc. the developer of the Ripple Protocol. Mr. Premoli holds a Masters Degree in Informatics from the University of Milano-Bicocca.
Jason Loewe, Chief Operating Officer & Corporate Secretary
Jason Loewe, Chief Operating Officer and Corporate Secretary, has an extensive background in financial services and compliance. He has served as a Corporate Compliance branch manager at IPC Securities Corp. He previously served as Compliance Officer at Assante Wealth Management. Previously, Mr. Loewe worked as an investment advisor at CIBC (Canadian Imperial Bank of Commerce). Mr. Loewe holds a B.A. in Economics from the University of Windsor.
Loma Vista will gain a valuable business in BitGold;
increased liquidity, based on the consolidated market capitalization of the Company and the listing of the Company’s common shares on a stock exchange; and
the combined company will have a strong board who has experience in capital markets and entrepreneurship, and a quality management and development team with complementary skills to facilitate the growth and development of BitGold’s globally-scalable money services business.
“Since my days as a professional investor I have wondered why there’s no easy way to own and spend gold in a legal, transparent, and tax-compliant manner,” said CEO, Roy Sebag. “Payment technology breakthroughs have created a historical opportunity to solve one of the main challenges preventing gold from being useful again in daily transactions. True gold ownership requires gold to be safely vaulted and stored, making it extremely difficult to spend, especially in micro-transactions. BitGold solved this problem by developing a patent-pending technology and platform that is part gold exchange, part payments technology and part custodian, resulting in a powerful user experience that advances gold from a physical element to an instantly accessible unit of account and store of value for the internet, an operating system for gold. We believe both Loma Vista Capital and BitGold Inc. shareholders will benefit as a result of this proposed transaction, providing increased liquidity and access capital for the resulting company and advancing a historic and powerful business idea. I would like to personally thank Dundee Capital Markets for immediately recognizing BitGold’s potential and helping Josh and I execute on our vision.” The Business Combination is a “related party transaction” as set out in Multilateral Instrument 61-101 Protection of Minority Shareholders in Special Transactions (“MI 61-101”) as Roy Sebag and Joshua Crumb, directors of Loma Vista, are also directors of BitGold; Roy Sebag, Joshua Crumb, and Daniel Crandall, officers of Loma Vista, are also officers of BitGold; and Roy Sebag, a control person of Loma Vista, is also a control person of BitGold (collectively, the “Interested Parties”). Messrs. Sebag and Crumb respectively own 17,250,000 and 1,500,000 BitGold Shares, representing 73.4% and 6.4% of the issued and outstanding BitGold Shares. Upon completion of the proposed Financing and Business Combination, and the purchase of 1,111,111 Subscription Receipts, Messrs. Sebag, Crumb, and Crandall will respectively hold 18,511,773 (53.6%), 1,642,837 (4.8%),and Nil (Nil%) of the common shares of Loma Vista, on a post consolidated basis.
Because it is a “related party transaction,” the Business Combination must be approved by (i) a majority of Loma Vista common shares voted at the meeting other than the shares owned or controlled by the Interested Parties, and (ii) a majority of Loma Vista common shares voted at the meeting. The consolidation, which is a condition of the closing of the Business Combination, and the change of Loma Vista’s name, must be approved by two-thirds of the shares voted at the meeting.
Pursuant to the business combination agreement, certain directors, officers and 10% shareholders of Loma Vista have agreed to support the Business Combination and related transactions and each entered into a lock up agreements with Loma Vista to vote their common shares in favour of the resolutions to be passed at the Loma Vista shareholders meeting.
Further details of the Business Combination and the interests of the Interested Parties will be provided in the management information circular in respect of the upcoming Annual and Special Meeting of Loma Vista Shareholders, to be mailed to the holders of Loma Vista common shares and posted on SEDAR under Loma Vista’s profile at www.sedar.com.
Completion of the transaction is subject to a number of conditions, including receipt of applicable regulatory approvals and shareholder approvals, including the approval of the Canadian Securities Exchange and disinterested Loma Vista shareholders. Additionally, the business combination agreement is subject to the conditions that the consolidation be approved and implemented, and completion of the Financing.
BitGold’s mission is to provide global access to gold for secure savings and transactions, making an extraordinary element useful and empowering again. BitGold is advancing the digital payments revolution by helping people around the world acquire, store, and spend gold with unprecedented simplicity.
The BitGold platform provides innovative solutions to the challenge of transacting with fully allocated and securely vaulted physical gold. BitGold accounts are free and convenient to open by anyone, anywhere* in just minutes. BitGold provides users with a secure vault account to purchase gold using a variety of electronic payment methods, or with currency through an ATM network. The platform also provides transaction capability including: instant cross-border gold payments, merchant invoicing and processing for gold, debit card spending of gold at traditional points of sale, conversions to a customer’s external digital-wallet or bank, and physical gold redemptions.
BitGold is a Canadian corporation with offices in Toronto, Canada, and Milan, Italy. BitGold has partnered with established professionals in auditing, vault security and web security, bullion dealing, and is committed to best-practice systems for compliance with all applicable laws and regulations regarding anti-money Laundering (“AML”) and Know Your Customer (“KYC”).
*The BitGold Platform will not initially be available to U.S. Residents and will be unavailable to residents of OFAC sanctioned countries
About Loma Vista
Loma Vista was incorporated pursuant to the Business Corporations Act (Ontario) on June 21, 2012. Loma Vista was previously a mineral exploration business, but ceased its exploration activities and relinquished its mineral property interests on January 9, 2015. Loma Vista’s current business is to identify and evaluate businesses and assets with a view to acquiring a new operating business.
For more information please contact Karman Lee 647-560-4313.
Completion of the transaction is subject to a number of conditions, including Canadian Securities Exchange acceptance and disinterested shareholder approval. 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 of Loma Vista to be prepared in connection with the transaction, any information released or received with respect to the transactions described herein may not be accurate or complete and should not be relied upon. Trading in the securities of Loma Vista should be considered highly speculative.
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. The Canadian Securities Exchange has in no way passed upon the merits of the proposed transactions and has neither approved nor disapproved the contents of this press release. The Canadian Securities Exchange does not accept responsibility for the adequacy or accuracy of this press release.
This news release contains certain “forward-looking information” within the meaning of applicable Canadian securities laws that are based on expectations, estimates and projections as at the date of this news release. The information in this release about the proposed business combination, the consolidation of the Loma Vista common shares, the Financing, the Debenture Conversion, the change of the Company’s name, and the future plans and objectives of the Company, are forward-looking information. Other forward-looking information includes but is not limited to information concerning: the subscription of certain persons to the Financing, the intentions, plans and future actions of the Company following the business combination, the timing for the implementation of the business combination, the listing of the Common Shares on the Canadian Securities Exchange, the potential benefits of the business combination, the likelihood of the business combination being completed, and receipt of applicable shareholder approvals.
Any statements that involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking information and are intended to identify forward-looking information.
This forward-looking information is based on reasonable assumptions and estimates of management of Loma Vista at the time it was made, and involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. Such factors include, among others, risks relating to uncertainties associated with the business combination; risks relating to the business combination agreement terminating in certain circumstances; risks relating to certain directors and officers of the Company possibly having interests in the business combination that are different from other shareholders; risks that other conditions to the consummation of the business combination agreement are not satisfied; global economic climate; dilution; the Corporation’s limited operating history; future capital needs and uncertainty of additional financing; the competitive nature of the industry; currency exchange risks; the need for the Corporation to manage its planned growth and expansion; the effects of product development and need for continued technology change; protection of proprietary rights; the effect of government regulation and compliance on the Corporation and the industry; network security risks; the ability of the Corporation to maintain properly working systems; theft and risk of physical harm to personnel; reliance on key personnel; global economic and financial market deterioration impeding access to capital or increasing the cost of capital; and volatile securities markets impacting security pricing unrelated to operating performance. Although Loma Vista has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. Loma Vista undertakes no obligation to revise or update any forward-looking information other than as required by law.