TORONTO, ONTARIO , a capital pool company listed on the TSX
Venture Exchange Inc. ("TSX Venture Exchange") (TSX VENTURE:
BIZ.P), announces that it entered into a letter agreement on July
18, 2008 with EnWise Holdings Inc. ("EnWise") for its Qualifying
Transaction that is not a Non Arm's Length Qualifying Transaction
in accordance with the policies of the TSX Venture Exchange. EnWise
is a private company based in Toronto, Ontario that, through its
operating subsidiaries, provides homeowners with affordable
solutions to improve the comfort and energy efficiency of their
homes so as to save money on energy bills and reduce their
environmental impact. EnWise conducts home energy assessments,
sells and installs a wide range of energy-efficiency products,
offers affordable financing options, and facilitates access to the
up to $10,000 currently available in government grants and
rebates.
The letter agreement provides for the amalgamation of Berkeley
with EnWise. All of the common shares of Berkeley and EnWise will
be cancelled and exchanged for common shares of the amalgamated
company in accordance with exchange ratios based upon the valuation
of EnWise in a private placement to be completed by EnWise
concurrently with the closing of the amalgamation, an agreed upon
valuation of Berkeley and the outstanding common shares of each
company. Upon the closing of the Qualifying Transaction, the name
of the amalgamated company will be EnWise Holdings Inc. ("NewCo"),
and the shareholders of EnWise immediately prior to the
amalgamation will collectively exercise control over NewCo.
Completion of the proposed Qualifying Transaction is subject to,
among other things, regulatory approval, shareholder approval of
EnWise and Berkeley, and the closing of the concurrent offering in
the minimum amount of $1 million and the maximum amount of $10
million, as described below.
In accordance with the terms of the letter agreement, all
executive officers, directors and 5% or greater shareholders of
EnWise will enter into support agreements concurrently with the
execution of the amalgamation agreement pursuant to which they will
agree to vote in favour of the Qualifying Transaction and against
all other matters and transactions that could adversely effect or
impede the Qualifying Transaction, and agree not to transfer their
shares prior to the EnWise shareholder meeting to approve the
Qualifying Transaction. Such EnWise shareholders will grant
Berkeley an irrevocable proxy to vote the shares owned by them in
accordance with the support agreements.
About EnWise Holdings Inc.
EnWise was founded in 2006 by Peter Hwang, Jay Wilgar, David
Carmichael and Roy Khan with a commitment to building a culture of
energy conservation by providing straightforward ways for
homeowners to protect the environment, lower home energy bills and
save money. EnWise currently serves the Greater Toronto Area and
southern Ontario residential housing markets and has plans to
support all of Ontario and other major metropolitan areas of
Canada. EnWise operates through its three wholly-owned subsidiaries
- EnWise Power Solutions Inc., EnWise Capital Corporation and
EnWise Building Science Inc.
EnWise services its customers by providing an affordable
one-stop-shop for solutions that improve the comfort and energy
efficiency of their home using the following four step process:
- Evaluation. EnWise Building Science is a licensed service
organization for the Natural Resources Canada ecoENERGY Retrofit
-Homes Program and will conduct a licensed ecoENERGY evaluation and
educate the home owner on how to reduce their energy footprint.
Based on the evaluation recommendations, we prepare a customized
ecoENERGY report and recommend the most energy efficient suite of
products and services that make sense for the homeowner.
- Equipment Sale and Installation. EnWise Power Solutions offers
licensed and reliable installations for a suite of recommended
energy saving products and services.
- Financing. EnWise Capital Corporation provides affordable
end-to-end equipment financing to help the homeowner achieve their
energy conservation goals sooner.
- Saving Money. EnWise's helps its customers start saving money
on their home energy costs and receive any available government
rebates.
EnWise has raised approximately $8 million in private capital
since its formation. As at July 18, 2008, the outstanding
securities of EnWise consisted of (i) 7,803,750 common shares; (ii)
13,240,000 preferred shares; (iii) options to purchase an aggregate
of 2,104,375 common shares; (iv) warrants to purchase an aggregate
of 15,404,600 common shares and 889,600 preferred shares. As at
July 18, 2008, EnWise had a total of 59 registered shareholders and
the directors and officers of EnWise collectively owned 4,560,000
common shares, or approximately 21.7%, of the outstanding shares of
EnWise.
On the basis of unaudited consolidated financial statements for
the year ended December 31, 2007, as at December 31, 2007, EnWise
and its subsidiaries had total assets of $3,104,384, liabilities of
$1,514,067, accumulated losses of $5,549,659, shareholders' equity
of $7,142,976 and available working capital of $1,880,571. For the
fiscal year ended December 31, 2007, EnWise and its subsidiaries
recorded revenue of $1,231,272 and a net loss of $5,373,184. On the
basis of unaudited consolidated financial statements prepared by
management for internal use, EnWise and its subsidiaries recorded
revenue of approximately $3,744,011 and a net loss of approximately
$2,183,111 for the six months ended June 30, 2008.
EnWise currently has 90 employees and consultants and is
headquartered in Toronto, Ontario.
EnWise was incorporated pursuant to Ontario law on October 19,
2007. EnWise currently has three wholly-owned subsidiaries: (i)
EnWise Power Solutions Inc., which was incorporated as Greensmart
Energy Corporation in Ontario on September 20, 2006; (ii) EnWise
Capital Corporation, which was incorporated as Greensmart Capital
Corporation in Ontario on September 20, 2006; and (iii) EnWise
Building Science Inc., which was incorporated in Ontario on March
15, 2007.
Terms of the Proposed Qualifying Transaction
The letter agreement provides that upon Berkeley's amalgamation
with EnWise, all of the common shares of Berkeley and EnWise will
be cancelled and exchanged for common shares of NewCo. The EnWise
common shares will be exchanged for NewCo common shares on a
one-for-one basis. The Berkeley common shares will be exchanged in
accordance with an exchange ratio based upon the valuation of
EnWise following the concurrent offering described below (up to a
maximum of $15 million), a fixed valuation of $1.65 million agreed
to by the parties for Berkeley and the aggregate number of common
shares of EnWise and Berkeley outstanding. Holders of options to
purchase Berkeley common shares will receive from NewCo an option
to purchase an adjusted number of common shares of NewCo based on
the exchange ratio at a correspondingly adjusted exercise price.
Subject to applicable regulatory approval, holders of options and
warrants to purchase common shares of EnWise will receive from
NewCo an option or warrant, as applicable, to purchase the same
number of common shares of NewCo on the same terms for each option
and warrant held by them, subject to adjustment for the conversion
of EnWise preferred shares into EnWise common shares on a
one-for-two basis upon the closing the amalgamation in accordance
with the provisions of EnWise's articles of incorporation.
Preliminary indications from prospective agents for the concurrent
offering, assuming completion of the bridge financing as described
below raising an aggregate amount of $3 million in gross proceeds,
are that the pre-money valuation of EnWise in the concurrent
offering will be approximately $8.25 million, or $0.25 per EnWise
common share, and the parties have agreed that the Qualifying
Transaction will be conditional on the completion of the concurrent
offering on mutually satisfactory terms. Assuming an offering price
of $0.25 per EnWise common share in the concurrent offering, the
Berkeley exchange ratio would be 0.60. According to such exchange
ratio and assuming completion of the EnWise bridge financing on
such terms and the concurrent offering raising an aggregate of $6
million in gross proceeds, an aggregate of 82,283,750 NewCo common
shares would be issued to the holders of EnWise common shares and
an aggregate of 6,600,000 NewCo common shares would be issued to
the holders of Berkeley common shares.
Between now and the amalgamation, holders of EnWise options and
warrants may exercise such securities, resulting in the issuance of
additional EnWise common shares, with the result that the number of
common shares of NewCo to be issued to holders of common shares of
EnWise will increase, while the number of common shares reserved of
NewCo for issuance to holders of EnWise options and EnWise warrants
will correspondingly decrease. For greater clarity, the
consideration to be issued to the holders of common shares EnWise
and Berkeley will not be increased to take into account, or
otherwise give effect to, the exercise price associated with
outstanding options and warrants.
Currently Skyberry Holdings Ltd., a company existing under the
laws of the Bahamas ("Skyberry"), either directly or indirectly,
owns 10% or more of the outstanding shares of EnWise. As of the
date of this release, Skyberry owns, either directly or indirectly,
approximately 47.5% of the outstanding shares of EnWise. Anthony
Lacavera, an officer and director of Berkeley, purchased $66,667 of
convertible debentures in the Enwise bridge financing. Bay Bridge
Partners, LLC, a California limited liability company in which
Kevin Rooney, a director of Berkeley, is a managing member and
holds 33.33% beneficial interest, $75,000 of convertible debentures
in the Enwise bridge financing. Each of Anthony Lacavera, Mike
Drake and Kevin Rooney, being all of the directors and officers of
Berkeley, hold approximately 12.1% of the outstanding common shares
of Berkeley.
Following the completion of the Qualifying Transaction, the
EnWise bridge financing and the concurrent offering on the above
terms, the principal shareholder of NewCo, either directly or
indirectly, will be Skyberry.
Following the completion of the Qualifying Transaction, the
EnWise bridge financing (not including the Skyberry Option (defined
below)) and the concurrent offering on the above terms assuming $6
million in gross proceeds is raised, Skyberry will own or control,
either directly or indirectly, 22.5% of the outstanding common
shares of NewCo.
Upon completion of the Qualifying Transaction, it is expected
that NewCo will be a Tier 1 issuer pursuant to the policies of the
TSX Venture Exchange. Assuming the completion of the Qualifying
Transaction, and assuming $3 million in gross proceeds is raised in
the EnWise bridge financing and $6 million in gross proceeds is
raised in the concurrent offering at a price of $0.25 per EnWise
common share, there would be 109,131,924 NewCo common shares
outstanding or issuable upon exercise of outstanding options and
warrants. Of these, the current shareholders and other security
holders of EnWise, including the investors in the bridge financing,
would hold an aggregate of 77,571,925 shares, or approximately
71.1%, the current shareholders of Berkeley would hold an aggregate
of 7,559,999 shares, or approximately 6.9%, and investors in the
concurrent offering would hold an aggregate of 24,000,000 shares,
or approximately 22.0%.
EnWise Bridge Financing
The letter agreement signed by the parties contemplated the
completion of a bridge financing by Enwise pursuant to which Enwise
would issue convertible debentures in amount of not less than $1
million and not more than $4.5 million to existing shareholders of
EnWise and certain other investors in a private placement,
including an option to purchase $1.5 million of convertible
debentures granted to Skyberry, which option expires six (6) months
from the date of the initial closing of the bridge financing (the
"Skyberry Option"). Pursuant to the terms of the bridge financing,
all such convertible debentures are to be automatically converted
into EnWise preferred shares, which will be converted into EnWise
common shares upon closing of the amalgamation in accordance with
EnWise's articles of incorporation. On July 21, 2008, Enwise
completed the initial closing of the bridge financing by issuing
convertible debentures in an aggregate amount equal to $2.7
million, leaving $300,000 of convertible debentures which may be
issued in subsequent closings in accordance with the terms of the
bridge financing.
Concurrent Offering
The Qualifying Transaction will be conditional upon the
completion of an EnWise concurrent private placement of common
shares raising not less than $1 million and not more than $10
million. Preliminary indications from prospective agents are that
the valuation of EnWise for the concurrent offering will be
approximately $0.25 per common share, or pre-money valuation of
EnWise of approximately $8.25 million assuming completion of the
bridge financing raising an aggregate amount of $3 million in gross
proceeds. The actual per share offering price will be determined in
the marketing of the offering. EnWise will select the agent to
EnWise in respect of the offering, subject to the reasonable
acceptance of Berkeley.
The proceeds from the concurrent offering, together with the
combined working capital of EnWise and Berkeley following the
completion of the proposed Qualifying Transaction, will be used for
expansion of infrastructure, sales and marketing initiatives and
for working capital. Upon completion of the proposed Qualifying
Transaction, the EnWise bridge financing and the concurrent
offering, EnWise anticipates having sufficient financial resources
to carry on its business plan for a period of at least 18
months.
Berkeley intends to apply to the TSX Venture Exchange for a
waiver of the sponsorship requirements for the Qualifying
Transaction based upon the brokered concurrent offering.
Proposed Directors and Management Team
At the closing of the Qualifying Transaction, Peter Hwang, Paul
Massara, Jay Wilgar and Brett Whalen will be the nominees of EnWise
to be elected to the Board of Directors of NewCo. Brice Scheschuk
will be the nominee director of Berkeley to be elected to the Board
of Directors of NewCo. Upon completion of the Qualifying
Transaction, the new senior management team of NewCo will consist
of Peter Hwang, Chief Executive Officer, Colin Reynolds, Director
of Finance, Paul Hebelka, Vice President of Operations, Thane
Sinclair, Vice President and Jay Wilgar, Secretary.
The following are brief resumes of the currently proposed
directors and senior officers of NewCo following the Qualifying
Transaction:
Peter Hwang, Chief Executive Officer and Director, EnWise
Holdings Inc. - Mr. Hwang is the founder of EnWise and has served
as its Chairman and Chief Executive Officer since its formation.
Mr. Hwang has extensive experience building multiple start-up
companies from inception to sustainability. Prior to EnWise, he
co-founded Easylease Corp., a successful asset-based financing and
syndication company. He has over 12 years experience in the
asset-based financing market. Easylease Corp. celebrated its 10th
year in business in 2006 and is a member of the Canadian Finance
and Leasing Association and Finance and Leasing Professionals of
Canada. As Vice President of Sales, he was key in building the
company and leading the sales and marketing initiatives while
assisting in the development and overall growth of Easylease Corp.
into one of the largest leasing brokers in Canada. Mr. Hwang holds
a Bachelor of Arts degree from Wilfrid Laurier University.
Colin Reynolds, Director of Finance, EnWise Holdings Inc. - Mr.
Reynolds joined EnWise in December 2007 as its Director of Finance,
and is responsible for all Financial Operations, IT and Human
Resources. Mr. Reynolds has been responsible for developing all
levels of financial controls and metrics within the EnWise Holdings
Inc. group of companies. Prior to that, Mr. Reynolds has held a
number of senior management positions with large multi-national
companies including nine years in the H/VAC industry with Union
Energy. Mr. Reynolds received his CMA designation in 1986, and
holds a Bachelor of Arts degree from Wilfrid Laurier
University.
Paul Hebelka, Vice President of Operations, EnWise Holdings Inc.
- Mr. Hebelka joined EnWise in December 2006 in the capacity of
Director of Operations of EnWise Power Solutions. Mr. Hebelka has
been instrumental in executing the deliverables model set forth for
the growth of the company and he continues to focus on company and
product line expansion. Mr. Hebelka has extensive experience in
directing operations and sales. Prior to joining EnWise, Mr.
Hebelka held various senior positions at Union Energy/Reliance Home
Comfort. Following an extremely successful seven year period in the
consumer finance business at Wells Fargo (earning numerous awards
for achievements in sales growth and profit), Mr. Hebelka joined
Clow Darling Ltd, a large commercial contractor and later became a
partner with the company, directing sales and service. Mr. Hebelka
graduated from Acadia University with a Bachelor of Arts
degree.
Thane Sinclair, Vice President, EnWise Holdings Inc. - Mr.
Sinclair joined EnWise in January 2007 as the Vice President of
Enwise Capital Corporation. Mr. Sinclair is responsible for
developing and implementing the financing model in support of
EnWise Power Solution's product offerings to the consumer
marketplace. Mr. Sinclair is also responsible for developing and
executing the expansion model for ECC to extend its services to
third party companies throughout Canada and the United States. He
brings with him over 20 years of experience in the equipment
financing industry and has held many senior management positions at
various large private and public sector companies such as CIT
Financial Ltd., Easylease Corp and XFD (Xerox Finance Division).
Mr. Sinclair earned both his Honours BSC and his MBA degrees from
Dalhousie University in 1985.
Jay Wilgar, Secretary and Director, EnWise Holdings Inc. - Mr.
Wilgar, together with Peter Hwang, founded EnWise in September 2006
and he's been a Director and its Secretary since formation. Mr.
Wilgar's career has spanned several entrepreneurial ventures. In
2002, he founded AIM PowerGen, Canada's leading wind power
development company, and is currently Vice-President and Director.
Since its inception, AIM has built and financed over 140 MW's
(megawatts) of wind generation projects valued at more than $300
million and has another 30 projects at various stages of
development. In 2006, AIM PowerGen was sold to a major UK based
energy firm for $29.1 million. Mr. Wilgar holds a Bachelor of
Commerce degree from Wilfrid Laurier University.
Brett Whalen, Director, EnWise Holdings Inc. - Mr. Whalen joined
the Board of Directors of Enwise in January 2007. Mr. Whalen has
been an investment banker at Jacob & Company Securities Inc.
and Dundee Securities Corporation since 2000. He has been actively
involved in a wide range of public & private financings and
merger & acquisition assignments in the mining, consumer
products and renewable power sectors. Prior to Dundee Securities,
he worked at CIBC World Markets for two years as a research
associate in both the mining and consumer products sectors. Mr.
Whalen holds a BA in Economics from Wilfrid Laurier University and
holds a CFA designation.
Paul Massara, Director, EnWise Holdings Inc. - Mr. Massara
joined the Board of Directors of Enwise in July 2008. Mr. Massara
has extensive commercial experience having held senior executive
roles for Centrica Plc for the last ten years. His last role with
the company was as President of Canadian Operations for Direct
Energy where he was responsible for the strategy and profit and
loss for a business with a turnover in excess of $2.7 billion,
growing it from $1.0 billion just three years earlier. He was also
responsible for home services, sales and customer experience on a
North American basis. He has extensive experience in deregulation,
corporate finance, marketing, sales, customer experience, risk
management and trading as it relates to the energy and service
sectors both in Europe and North America. He has a Masters in
Corporate Finance from London Business School and was voted one of
the Top 40 Under 40 Canadian leaders in 2005. Mr. Massara is a
Board member of the Toronto Board of Trade and also several
charitable organizations.
Brice Scheschuk, Chief Financial Officer, Globalive
Communications Corp. - Mr. Scheschuk is the Chief Financial Officer
of Globalive Communications Corp., a provider of telecommunications
solutions globally, and has been with Globalive since September
2003. He is also the Co-President and Secretary of Brave Consulting
Corporation, a private investment company, and has held those
positions since May 2000. He is the Chairman of the Board of
iLOOKABOUT Corp. and a director of Hy-Drive Technologies Inc., both
TSX-Venture listed companies, as well as a director of numerous
private companies. Mr. Scheschuk has 13 years of financial
experience in the telecommunications, technology, media and
financial industries. From April 2001 to September 2003, Mr.
Scheschuk was the Corporate Controller of Leitch Technology
Corporation, a manufacturer of hardware and software for the
professional video market listed on the Toronto Stock Exchange.
From March 1999 to March 2001, he was Vice President of Finance and
Secretary of Level Jump Financial Group, Inc. (and predecessor
companies), an investor relations company listed on the U.S. OTC
Bulletin Board and a NASD registered broker-dealer. Mr. Scheschuk
received a B.Comm. (Honours) Finance degree from Dalhousie
University in April 1994 and earned his Canadian Chartered
Accountant designation while working for Coopers & Lybrand (now
PricewaterhouseCoopers) from May 1994 through September 1998.
Conditions to Completion of Qualifying Transaction
Completion of the Qualifying Transaction is subject to a number
of conditions, including, but not limited to, the closing of the
concurrent offering, acceptance by the TSX Venture Exchange,
NewCo's satisfaction of the minimum listing requirements of the TSX
Venture Exchange for a Tier 2 issuer, other regulatory approvals
and third party consents, shareholder approval of EnWise and
Berkeley, completion of satisfactory legal, accounting and
financial due diligence by both Berkeley and EnWise, and completion
of formal agreements, including an amalgamation agreement among
Berkeley and EnWise and certain of EnWise's security holders. There
can be no assurance that the Qualifying Transaction will be
completed as proposed or at all.
Investors are cautioned that, except as disclosed in the
management information circular to be prepared in connection with
the Qualifying Transaction and any offering document prepared in
respect of the concurrent offering, any information released or
received with respect to the Qualifying 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.
Cautionary Note Regarding Forward-looking Statements
This news release contains forward-looking statements
(including, without limitation, information regarding the proposed
Qualifying Transaction and the business opportunities and plans of
EnWise and NewCo) that involve risks and uncertainties that could
cause the results of Berkeley to differ materially from
management's current expectations. Actual results may differ
materially due to a number of factors including, among others: the
Qualifying Transaction may not close; market acceptance of EnWise's
products and services; the impact of competitive products and
services; and costs of product and service development. The matters
discussed in this news release also involve risks and uncertainties
described in Berkeley's documents filed from time to time with the
Canadian securities regulatory authorities. Berkeley assumes no
obligation to update the forward-looking information contained in
this new release.
EnWise is a trademark of EnWise Power Solutions Inc. Other names
mentioned herein are the property of their respective owners.
The TSX Venture 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. The TSX Venture Exchange does
not accept responsibility for the adequacy or accuracy for this
release.
Contacts: Berkeley Capital Corp. II Anthony Lacavera Chief
Executive Officer 1-877-445-8606 EnWise Holdings Inc. Peter Hwang
Chief Executive Officer (416) 444-9700 x315
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