PROSTAR HOLDINGS INC. ANNOUNCES CLOSING OF MERGER TRANSACTION

2020-12-29 18:34 ET – News Release

Mr. Page Tucker reports

PROSTAR HOLDINGS INC. ANNOUNCES CLOSING OF MERGER TRANSACTION

Pursuant to the merger agreement dated May 22, 2019, as amended from time to time between ProStar Holdings Inc. (formerly Doxa Energy Ltd.), ProStar Geocorp Inc. and Doxa Merger Corp., the company completed its previously announced merger transaction with ProStar, as described in the company’s press releases dated Dec. 17, 2020, Nov. 20, 2020, Oct. 22, 2020, May 23, 2019, and Nov. 7, 2018 (collectively, the prior news releases), and the company’s information circular dated Nov. 16, 2020.

The company will continue to carry on the business of ProStar and the common shares of the company are expected to begin trading as a Tier 2 technology issuer on the TSX Venture Exchange under the symbol MAPS on Jan. 11, 2021.

Completion of the concurrent financing

In connection with the transaction, the company completed a non-brokered private placement of 14 million subscription receipts at a price of 40 cents per subscription receipt for aggregate gross proceeds of $5.6-million, as further described in the company’s news release dated Oct. 26, 2020.

Immediately prior to closing the transaction, each subscription receipt issued pursuant to the private placement was converted into one unit of the company comprising one share and one-half of one non-transferable common share warrant to purchase one additional share at a price of 60 cents per share for a period of 24 months from the date of issuance, provided that if the closing price of the shares on the TSX-V, or any other stock exchange on which the shares are listed, is at a price equal to or greater than $1.20 for a period of 10 consecutive trading days, beginning on the date that is four months and one day following the closing date of the transaction, then the company may accelerate the expiry date of the warrants by giving written notice to the warrant holders that the warrants will expire on the date that is not less than 30 days from the date of the notice.

In connection with the private placement, the company paid an aggregate of $351,575 in finders’ fees and issued an aggregate of 878,937 non-transferable finders’ warrants, each exercisable at a price of 40 cents per share for a period of 24 months from issuance.

Completion of the transaction

Under the terms of the merger agreement, and as further described in the circular, the transaction was completed by way of a merger under the laws of Delaware, whereby:

  1. Doxa SubCo merged with and into ProStar, with ProStar surviving as a wholly owned subsidiary of the company;
  2. Each outstanding share of ProStar converted into four shares of the company; and
  3. Each outstanding common share purchase warrant in the capital of ProStar converted into common share purchase warrant to acquire, on the same terms and conditions as were applicable to such ProStar warrant, four shares for each such ProStar warrant held.

Effective upon completion of the transaction, Page Tucker was appointed as a director and chief executive officer, Jonathan Richards was appointed as a director and chief financial officer, Vasanthan Dasan was appointed as a director and chief operating officer, and Herb McKim was appointed as a director of the company. Accordingly, the board of directors of the company is now composed of Mr. Tucker (CEO), Mr. Richards (CFO), Paul McKenzie, Mr. Dasan (COO) and Mr. McKim.

The company would like to thank John D. Harvison, Mark Bronson, Daniel Frederiksen, Gerald Graham, Jonathon Weiss and Shauna Hartman for their service to the company.

Grant of stock options

The company also announces that a total of seven million incentive stock options have been granted to directors, officers, employees and consultants of the company pursuant to the company’s stock option plan. The options have an effective grant date of Dec. 29, 2020, vest over a two-year period, and are exercisable for a period of five years at a price of 40 cents per share.

Escrow restrictions

As described in the circular, certain of the shares issued in connection with the transaction are subject to escrow requirements or seed share resale restrictions in accordance with TSX-V Policy 5.4 — escrow, vendor considerations and resale restrictions.

In addition, the following shares issued in connection with the transaction are subject to contractual restrictions:

  1. 30,255,368 shares issued to former shareholders of ProStar pursuant to the merger agreement are subject to a contractual hold period of 24 months from the date of the final exchange bulletin (as defined in the policies of the TSX-V); and
  2. 3,390,601 shares issued pursuant to the debt settlement transaction (as defined below) are subject to a contractual hold period of 12 months from the date of the final exchange bulletin.

Other corporate actions

In connection with the completion of the transaction, the company also completed the following corporate actions:

  1. The company completed the consolidation of its common shares on a one-new-for-17-old basis prior to closing the transaction;
  2. The company changed its name to ProStar Holdings Inc.;
  3. The company completed the disposition of the company’s oil and gas assets;
  4. The company completed debt settlements with the company’s related party creditors in connection with certain outstanding loans of the company; and
  5. The company obtained shareholder approval of, amongst other things, the transaction, the consolidation, the disposition and the debt settlement transaction.

For further details on the transaction, readers are referred to the prior news releases and the circular, all of which are available under the company’s profile on SEDAR.

Change of auditor

Upon completion of the transaction, Davidson & Company was appointed as the company’s auditor. Smythe LLP, the company’s former auditor, resigned as auditor of the company upon completion of the transaction.

Trading halt

The shares continue to be halted from trading, and the trading of shares is expected to remain halted until Jan. 11, 2021, or as otherwise determined by the TSX-V.

About the company

The company’s subsidiary, ProStar, is incorporated under the laws of Delaware and is a software-as-a-service (SaaS) company that provides patented precision mapping solutions. ProStar’s flagship solution is PointMan, a natively cloud and mobile solution designed to capture, record and display the precise location of subsurface assets, including buried utilities and pipelines.