Pursuant to the Transaction, TIMIA has acquired the loan book and other assets, and assumed specific related debt of Pivot Financial Inc. (“PFI”), acquired all of the outstanding common shares of Pivot Financial Services Inc. (“PFSI”), and established a new wholly-owned limited partnership to manage the loan book, other assets, and specific related debt of PFI. VANCOUVER, BC, Sept. 21, 2021 /CNW/ – TIMIA Capital Corporation (“TIMIA” or the “Company”) (TSXV: TCA) (OTCQB:TIMCF) is pleased to announce that it has closed on the previously announced transaction to acquire the business of Pivot Financial (“Pivot”), a Canadian-based private lender focused on creative financing solutions for the small and medium business market.
“The acquisition of Pivot Financial takes TIMIA Capital assets to over $100 million, thereby providing critical economies of scale,” said Mike Walkinshaw, CEO of TIMIA. “Our fintech-based loan origination and underwriting platform has proven to efficiently and effectively originate and manage loans and we look forward to applying our platform to those loan facilities sourced and managed by Pivot.”
Pivot Financial has successfully grown to profitability over the past 6 years and will accelerate its growth through the combination with TIMIA. Ken Thomson, CEO of Pivot, has been appointed Chief Strategy Officer and has joined the Board of Directors of TIMIA. Dan Flaro, President of Pivot, will continue in his role with respect to the Pivot business.
The purchase price of the acquisition was $6.0 million plus working capital comprised of aggregate consideration payable by TIMIA including the issuance of 5,000,000 Common Shares (at a deemed price of $0.30 per Common Share) and 2,000,000 Preferred Shares (at a deemed price of $1.00 per Preferred Share) and the payment of $1.0 million in cash (subject to post-closing working capital adjustments) to Ken Thomson (“Thomson”), and the issuance of 1,500,000 Preferred Shares (at a deemed price of $1.00 per Preferred Share) to PFI, a company owned and controlled by Thomson.
In addition, the Company also announces that it expects to shortly complete a private placement of 1,666,667 Common Shares at a price of $0.30 per Common Share and 500,000 Preferred Shares at a price of $1.00 per Preferred Share with Dan Flaro (“Flaro”), a key employee of PFSI, for gross proceeds of $1,000,000 (the “Investment Transaction”). The Company anticipates using proceeds of the Investment Transaction for general corporate purposes. All securities issued in respect of these transactions are subject to a 4-month hold period in accordance with applicable securities laws and the policies of the TSX Venture Exchange.
The Company has entered into voting agreements with Thomson, PFI and Flaro, whereby, among other things, these parties will agree to vote Common Shares held by them in favour of matters proposed by management of the Company for a period of 24 months, subject to certain standard exceptions (the “Voting Agreements”).
Early WarningIn connection with the closing of the transaction, Thomson acquired ownership and control of 5,000,000 Common Shares, 3,500,000 Preferred Shares and 100,000 stock options. Prior to the completion of the transaction, Thomson owned and controlled no Common Shares, Preferred Shares or stock options of the Company.
The Company has also granted Thomson 100,000 stock options exercisable at a price of $0.30 per share for a period of 5 years, and Flaro, a key employee of PFSI, 150,000 stock options exercisable at a price of $0.30 per share for a period of 5 years. Thomson and Flaro have entered into employment agreements with the Company.
Thomson now owns and/or controls an aggregate of 5,000,000 Common Shares, 3,500,000 Preferred Shares entitling Thomson to acquire an additional 3,500,000 Common Shares and 100,000 stock options entitling Thomson to acquire an additional 100,000 Common Shares, representing approximately 9.52% of the issued and outstanding Common Shares assuming completion of the Investment Transaction (or approximately 15.32% calculated on a partially diluted basis, assuming completion of the Investment Transaction and the conversion of the 3,500,000 Preferred Shares and 100,000 stock options).
Pursuant to transaction, the Company entered into Voting Agreements with Thomson and Pivot Financial Inc., whereby these parties agreed to vote Common Shares held by them in favour of matters proposed by management of the Company for a period of 24 months, subject to certain standard exceptions in the event of change of control transactions. In addition, Thomson shall have a right to nominate one director to the board of the Company for a period ending after the Company’s 2023 annual general meeting of shareholders. Thomson is the initial nominee director and has been appointed as of the date hereof.
The securities were acquired in a private transaction which did not take place through the facilities of any market for the Company’s securities. This transaction was effected for investment purposes and Thomson could increase or decrease his investment in the Company at any time, or continue to maintain his current investment position, depending on market conditions or any other relevant factor. The securities were acquired for the consideration described above in this news release.
This portion of this new release is issued pursuant to National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues, which also requires an early warning report to be filed on SEDAR (www.sedar.com) containing additional information with respect to the foregoing matters. A copy of the related early warning report may be obtained on the Company’s SEDAR profile or by contacting Thomson at 25 Price Street, Toronto, Ontario M4W 1Z1, Attention: Kenneth Thomson tel: (844) 839-3863 ext. 223. The head office of TIMIA is located at Suite 835 – 1100 Melville Street, Vancouver, British Columbia, V6E 4A6.
About Pivot Financial Pivot is an asset manager that deploys funds on behalf of institutions, retail investors, high net worth individuals, its management team and shareholders. We seek out favourable risk return lending opportunities through prudent credit assessment and diversification targeting lower mid market borrowers in Canada. We manage all aspects of borrower relationships including origination, underwriting and ongoing portfolio management. For more information please visit: www.pivotfinancial.com
About TIMIA Capital Corporation TIMIA Capital Corporation has developed a proprietary loan origination platform that services private market, high-yield loan opportunities, thereby earning recurring fees and a share of the profit. While focusing on the fast growing, global, business-to-business Software-as-a-Service (or SaaS) segment, TIMIA’s automated loan origination system is applicable to multiple technology sectors, it creates scalable and profitable growth for TIMIA’s stakeholders. For more information about TIMIA Capital Corporation, please visit www.timiacapital.com
Neither the 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 news release.
SOURCE TIMIA Capital Corp.
Certain information and statements in this news release contain and constitute forward-looking information or forward-looking statements as defined under applicable securities laws (collectively, “forward-looking statements”). Forward-looking statements normally contain words like ‘believe’, ‘expect’, ‘anticipate’, ‘plan’, ‘intend’, ‘continue’, ‘estimate’, ‘may’, ‘will’, ‘should’, ‘ongoing’ and similar expressions, and within this news release include any statements (express or implied) respecting the completion of the Transaction and Investment Transaction, the future performance of the combined companies, the conditions of closing the transaction, including the final approval of the TSXV, making further disbursements upon the completion of certain milestones, future value creation for shareholders, the growth of the company’s investment portfolio and expectations regarding making further investments in the coming months. Forward-looking statements are not guarantees of future performance, actions, or developments and are based on expectations, assumptions and other factors that management currently believes are relevant, reasonable and appropriate in the circumstances, including, without limitation, the following assumptions: that the conditions to the completion of the Transaction and Investment Transaction will be satisfied, that the Company and its investee companies are able to meet their respective future objectives and priorities, assumptions concerning general economic growth and the absence of unforeseen changes in the legislative and regulatory framework for the Company. Although management believes that the forward-looking statements are reasonable, actual results could be substantially different due to the risks and uncertainties associated with and inherent to Timia’s business. Material risks and uncertainties applicable to the forward-looking statements set out herein include, but are not limited to, the conditions of the Transaction and Investment Transaction not being satisfied, the Company having insufficient financial resources to achieve its objectives; availability of further investments that are appropriate for the Company on terms that it finds acceptable or at all; successful completion of exits from investments on terms that constitute a gain when no such exits are currently anticipated; intense competition in all aspects of business; reliance on limited management resources; general economic risks; new laws and regulations and risk of litigation. Although Timia has attempted to identify factors that may cause actual actions, events or results to differ materially from those disclosed in the forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, predicted, estimated or intended. Also, many of the factors are beyond the control of Timia. Accordingly, readers should not place undue reliance on forward-looking statements. Timia undertakes no obligation to reissue or update any forward-looking statements as a result of new information or events after the date hereof except as may be required by law. All forward-looking statements contained in this news release are qualified by this cautionary statement.
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