Arkadia Capital Corp. and Moduurn Mobility Inc. Announce Execution of Amalgamation Agreement

CALGARY, Alberta and VICTORIA, British Columbia, Aug. 23, 2022 (GLOBE NEWSWIRE) — Arkadia Capital Corp. (NEX:AKC.H) (“Arkadia“) and Moduurn Mobility Inc. (“Moduurn“) are pleased to announce that they have entered into an amalgamation agreement dated August 16, 2022 (the “Amalgamation Agreement“), pursuant to which Moduurn and 1324976 B.C. Ltd. (the “Subco“) will amalgamate and continue as one corporation, which will be a wholly-owned subsidiary of Arkadia (the “Proposed Transaction“).

The parties intend the Proposed Transaction to constitute the “Qualifying Transaction” of Arkadia within the meaning of the policies of the TSX Venture Exchange (the “Exchange“). Following the completion of the Proposed Transaction, Arkadia will carry on the current business of Moduurn.

Moduurn

Moduurn was incorporated under the laws of the Province of British Columbia on September 1, 2016, and is a privately-held software-as-a-service company that has developed a commission-free, white-label digital ordering and delivery service that connects restaurant brands and corporate cafeterias to the on-demand world. Moduurn software enables business operators to accept orders directly into the restaurant or corporate cafeteria, from a brand’s own website or app and social media platforms. Unlike competing solutions which take as much as 30% of the value of online sales, Moduurn provides a cost-effective solution without the large up-front expense of developing custom applications, allowing hospitality, corporate cafeterias, and retail businesses to save money on operational costs, make money from take-out and delivery, and strengthen their brands.

Immediately before the Qualifying Transaction, Moduurn expects its outstanding capital to consist of (a) 58,276,865 common shares (the “Moduurn Shares“), (b) options to purchase an aggregate of 14,000,000 Moduurn Shares (the “Moduurn Options“); (c) warrants to purchase an aggregate of 9,069,253 Moduurn Shares (the “Moduurn Warrants“); and (d) loans in the aggregate principal amount of $616,000 that are convertible into an aggregate of 770,000 Moduurn Shares. No individual has beneficial ownership of or control or direction over, directly or indirectly, 20% of more of the outstanding Moduurn Shares on a non-diluted or fully-diluted basis.

The following tables summarize certain financial information about Moduurn for the 12 months ended December 31, 2021:

The foregoing financial information was derived from the unaudited financial statements of Moduurn for the 12 months ended December 31, 2021. Readers are cautioned that, because the financial statements of Moduurn were internally prepared, there can be no assurance that the financial information is accurate prior to the completion of an independent audit.

Arkadia

Arkadia was incorporated under the laws of the Province of Alberta on July 18, 2011, and is a CPC, as that term is 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.

Immediately before the Proposed Transaction, Arkadia expects its outstanding capital to consist of 6,523,343 common shares (the “Arkadia Shares“).

Proposed Transaction

The Amalgamation Agreement provides that Arkadia will acquire all of the issued and outstanding securities of Moduurn by way of a three-cornered amalgamation. More specifically:

The Proposed Transaction is based on a deemed price of $0.025 per Arkadia Share, and a deemed price of $1.00 per Moduurn Share, on a pre-Consolidation basis.

Concurrent Offering

Concurrently with the completion of the Proposed Transaction, Moduurn intends to close a private placement of up to 5,000,000 Moduurn Shares, at a purchase price of $1.00 per Moduurn Share, for gross proceeds of up to $5,000,000 (the “Concurrent Offering“). The net proceeds of the Concurrent Offering will be used for general working-capital purposes. The parties will provide additional details about the Concurrent Offering in a subsequent press release.

Conditions Precedent to Closing of Proposed Transaction

The Proposed Transaction is subject to a number of significant conditions, including that: (a) the Alberta Securities Commission and British Columbia Securities Commission have revoked the cease trade orders against Arkadia more particularly described below; (b) the Exchange has conditionally accepted the Concurrent Offering and Proposed Transaction; (c) Moduurn has completed the Concurrent Offering; (d) Arkadia shareholders have approved the Consolidation and Name Change; (e) Moduurn shareholders have approved the Amalgamation. The Proposed Transaction is not subject to Arkadia shareholder approval under the policies of the Exchange.

Business of the Resulting Issuer

After the completion of the Proposed Transaction, the parties expect the Resulting Issuer to be classified in the “Technology” industry segment of the Exchange, and will carry on the current business of Moduurn.

Capitalization of the Resulting Issuer

Pursuant to the Proposed Transaction, Arkadia and Moduurn expect the outstanding capital of the Resulting Issuer to consist of: (a) approximately 63,439,949 Post-Consolidation Shares; (b) options to purchase 14,000,000 Post-Consolidation Shares; (c) warrants to purchase 9,069,253 Post-Consolidation Shares; and (d) loans in the aggregate principal amount of $616,000 that are convertible into an aggregate of 770,000 Post-Consolidation Shares.

Resulting Issuer Insiders

Upon completion of the Proposed Transaction, it is anticipated that the following individuals will serve as directors or officers, or both, of the Resulting Issuer:

Fahad Almoamar – Director. Mr. Almoamar is an international angel investor with 10+ years of experience working and investing with international start-ups. In 2016, Mr. Almoamar was recruited by the Saudi government to lead the Vision 2030’s roadmap for the Saudi Media City and the Saudi media ecosystem revamp strategy, at the General Commission of Audiovisual Media (GCAM). During his time there and in 2017, Mr. Almoamar was appointed as the first chief of the Saudi cinema industry, to lead its launch and regulation development. In addition, Mr. Almoamar is the founder of Connect Global Strategies and Pivot Startup Studio, bringing his experience investing and working with start-ups. Pivot works for angle investors to launch their own and specialized start-ups.

David Aulenback – Chief Financial Officer. Mr. Aulenback is the Chief Financial Officer of Moduurn. Prior to joining Moduurn, he held the position of VP Finance and CFO in the aerospace and defense industry with Stelia Aerospace NA Inc. and then Ultra Maritime. Mr. Aulenback spent over 10 years in the public accounting field, providing accounting services and managing audits for companies in a wide range of industries in Canada, the U.S., and Southeast Asia.

Richard Butler – Director and President. Mr. Butler is Co-Founder, President, Director and Chair of Moduurn. Richard Butler is a distinguished serial entrepreneur and angel investor with a proven track record of unlocking value, leading teams and delivering superior results for more than 30 years. Richard became a co-founder of Cognotion, a New York based technology start-up that develops work training products for tablets and smartphones for some of the world’s largest corporations, including Bridgestone/Firestone, Telefonica, Loews Hotels and the US National Institutes of Health. Currently, Cognotion’s ReadyCNA course in partnership with Cinematic Health Education and the Red Cross, is currently being donated to quickly train one million volunteer health care workers to be on the front lines of the COVID-19 crisis. His experience with team building, corporate structure, business development and investment capital has seen him lead the financial and organizational push to build another successful technology company, Moduurn, from idea inception to start up to full commercialization. Richard Butler is anticipated to have beneficial ownership of, or control or direction over, directly or indirectly, more than 10% of the Post-Consolidation Shares.

Max Humphreys – Chief Executive Officer. Mr. Humphreys is Chief Executive Officer of Moduurn. He has over 25 years of experience in the software industry working in a variety of sales, marketing and corporate development roles. Mr. Humphreys previously served with public companies such as DivX and ACD Systems and private companies prior to acquisition such as Cryptobuddy, Camshare, and Manycam.

Derrold Norgaard – Director. Mr. Norgaard is a Fellow of the Chartered Professional Accountants of British Columbia. Mr. Norgaard is currently a partner of NKPG Services Ltd., where he focuses on a family office role – acting as a private tax advisor for high wealth individuals, families and businesses. For most of his career, Mr. Norgaard was a Tax Partner with KPMG LLP, one of Canada’s largest accountancy and consultancy firms, working out of both the Vancouver and Victoria offices. Mr. Norgaard held the dual role of Tax Partner in Victoria and Office Managing Partner for the office until his departure from KPMG LLP in 2008. Mr. Norgaard has acted on several boards for both private and public companies during his career.

William Scigliano – Director. Mr. Scigliano has been a successful technology entrepreneur in the U.S. and has been the CEO and Chairman of successful NASDAQ companies. Bill also served as an executive with the Attorney General in British Columbia for 10 years.

Dennis Stacey – Director. Mr. Stacey is an innovative entrepreneur and insightful investor. He brings 20 years of applied experience driving sales and growth in challenging, competitive and volatile new markets throughout North America and abroad. Mr. Stacey has worked, advised and contributed to many world-renowned organizations including the XPRIZE Foundation, Virgin Galactic, Insight Global, Helmsley Hotels, WanderPort Wireless, CVS, Walmart, and 7-eleven. Mr. Stacey’s projects, successes and career have been discussed in Wired Magazine, Fast Company, Canada Business, and many other well-known international publications both on-and-offline.

In addition, the Amalgamation Agreement permits each of Arkadia and Moduurn to designate one additional director of the Resulting Issuer. The parties will provide details about the additional directors and the corporate secretary of the Resulting Issuer in a subsequent press release.

Upon completion of the Proposed Transaction, it is anticipated that Mr. Butler will have beneficial ownership of, or control or direction over, directly or indirectly, more than 10% of the Post-Consolidation Shares.

Arm’s Length Negotiations

The Proposed Transaction does not constitute a “Non-Arm’s Length Qualifying Transaction”, as that term is defined in the policies of the Exchange.

Cease Trade Orders

On January 4, 2019, the Alberta Securities Commission issued a cease trade order against Arkadia for failure to file annual audited financial statements, annual management’s discussion and analysis of operations, and certification of annual filings for the year ended August 31, 2018. The British Columbia Securities Commission issued a similar cease trade order a short time later. Arkadia cannot proceed with the Consolidation or Amalgamation unless the Alberta Securities Commission and British Columbia Securities Commission revoke the cease trade orders. There can be no assurance that they will grant revocations. If they do not grant revocations, then Arkadia will not be able to complete the Proposed Transaction.

Sponsorship

In connection with the Proposed Transaction, Arkadia intends to apply for an exemption from the sponsorship requirements of the Exchange. There can be no assurance that the Exchange will grant the exemption. If the Exchange does not grant the exemption, then Arkadia must retain a sponsor of the Proposed Transaction in accordance with the policies of the Exchange. 

Exchange Advisory

Completion 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 Disclaimer

This 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 and Concurrent Offering. The forward-looking information is based on certain key expectations and assumptions made by Arkadia and Moduurn, including expectations and assumptions concerning the ability of Arkadia and Moduurn to complete the Proposed Transaction and Concurrent Offering. Although Arkadia and Moduurn 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 Moduurn 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 Moduurn to satisfy the conditions precedent to the Proposed Transaction. 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 Moduurn 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 Information

For further information about Arkadia, please contact:

Adam Rock
Chief Executive Officer
403-536-0025
arock@linmac.com

For further information about Moduurn, please contact:

Max Humphreys
Chief Executive Officer
250-544-1629
ir@moduurn.com

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.