Hopefield Ventures Two Inc. Announces Execution of Unit Contribution and Exchange Agreement

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VANCOUVER, British Columbia –TheNewswire --February 5, 2024 –Hopefield Ventures Two Inc.(TSXV:HVII.P) (“HVII” or the “Company”)is pleasedtoannounce that, further to its prior press release dated July 20, 2023, it has entered into a definitive unit contribution and exchange agreement dated February 5, 2024 (the “Definitive Agreement”) with Predictive Technologies, LLC (“Predictive”), Qeleo Technologies Finance Company Ltd. (“Finco”), 1460984 B.C. Ltd., a wholly owned subsidiary of HVII (“HVIISubCo”), and certain securityholders of Predictive (the “Contributors”), which, subject to certain conditions and approval of the TSX Venture Exchange (the “TSXV” or the “Exchange”), will result in the reverse takeover of HVII by Predictive and is intended to constitute HVII’s “Qualifying Transaction” (as such term is defined in Policy 2.4 –Capital Pool Companies(“Policy 2.4”) of the TSXV) (the “Transaction”).

 

Summary of the Transaction

 

The Transaction will be structured as asecuritiesexchange(the “Securities Exchange”) in accordance withthe Definitive Agreement,pursuant towhichHVIIwill acquire all of the issued and outstandingunitsin the capital ofPredictive(the “Predictive Units”) fromthe Contributors in exchange for the issuance to the Contributors of shares in the capital of HVII (the “Contributor Consideration Shares”)on the basis of37.9771542350983 Contributor ConsiderationSharesfor eachPredictive Unitissued and outstanding as at immediately prior to the closing of the Transactionresulting in the issuance of 71,428,574 Contributor Consideration Shares at a deemed price per Contributor Consideration Share of $0.35(the “Closing”).

 

To give effect to the Transaction, the following steps will occur immediately prior to the Closing in accordance with the Definitive Agreement:

 

• Finco will complete the Concurrent Financing (as defined and described below); 

 

• Finco will repurchase the common shares of Finco (Finco Shares”) held by the initial Finco shareholder for an amount equal to the subscription price paid for such Finco Shares by the initial Finco shareholder (the “Share Repurchase”); 

 

• HVIIwillcomplete a consolidation ofitsissued and outstandingcommon shares (HVII Shares”)on the basis of one post-consolidatedHVIIShare foreach3.13031234348438pre-consolidationHVIIShare, resulting in an aggregate of 5,714,286 post-ConsolidationHVIIShares(theConsolidation”) 

 

• HVIIwill change its name to “Qeleo Group Inc.” or such other name as Predictive may determine and which is acceptable to the Exchange and any other applicable regulatory authorities(theName Change”) 

 

• The Subscription Receipts (as defined below) shall automatically convert into the FinCo Shares and the FinCo Warrants (as defined below) in accordance with the terms of anagency agreement to be entered into between FinCo and the Agents (as defined below) and a subscription receipt agreement to be entered into between FinCo, the Agents and Computershare Trust Company of Canada; 

 

• HVII SubCo and Finco will amalgamate (theAmalgamation”) under theBusiness Corporations Act(British Columbia) (theBCBCA”)to form an amalgamated entity (Amalco”), resulting in the indirect acquisition by HVII of all the issued and outstanding shares of Finco; 

 

• Amalco will be liquidated and dissolved (theAmalco Dissolution”), resulting in all the assets of Amalco (being solely the net cash proceeds resulting from the Concurrent Financing (as defined below)) being transferred to HVII by operation of law; and 

 

• the applicable parties will complete the Securities Exchange. 

 

Upon Closing, the security holders of Predictive will hold approximately 71,428,571 shares (the “Resulting Issuer Shares”) in the capital of the resulting issuer (the “Resulting Issuer”), representing approximately 83.3% of the Resulting Issuer Shares, whereas the current shareholders of HVII will hold5,714,286Resulting Issuer Shares, representing approximately 6.7% of the outstanding Resulting Issuer Shares. Investors in the Concurrent Financing will hold 8,571,428 Resulting Issuer Shares, representing approximately 10.0% of the outstanding Resulting issuer Shares.

 

Following Closing, the Resulting Issuer will carry on the business currently carried on by Predictive and HVII will be a Tier 2 Technology Issuer under the policies of the TSXV.

 

Completion of the Transaction is subject to the satisfaction of a number of customary conditions, including, but not limited to: (i) receipt of all required approvals and consents relating to the Transaction, including without limitation, (A) acceptance by the TSXV and receipt of other applicable regulatory approvals, (B) any third party consents, and (C) any approvals of the boards of directors and securityholders of Predictive and HVII, as applicable and as required by the TSXV and under applicable corporate or securities laws; (ii) completion of the Consolidation and the Concurrent Financing; (iii) completion of the Share Repurchase; (iv) completion of the Name Change; (v) completion of the Amalgamation and Amalco Dissolution; (vi) HVII shall have positive working capital; (vii) Finco shall have positive working capital and, other than as disclosed to HVII in writing, neither Predictive nor Finco shall have any long-term debt; (viii) the director nominees of Predictive shall have been appointed to the board of directors of the Resulting Issuer, conditional upon the completion of the Transaction, and the management nominees of Predictive shall have been duly appointed as the management of the Resulting Issuer as of Closing; (ix) no material adverse change shall have occurred in the business, results of operations, assets, liabilities or financial condition of Predictive, Finco or HVII, as applicable; (x) there being no prohibition under applicable laws against consummation of the Transaction; (xi) all directors, officers and members of management of HVII shall have delivered resignations and mutual releases in form and substance acceptable to Predictive, acting reasonably, and no termination, severance or other fees shall be payable to any such directors, officers or membersof management of HVII in connection with such resignations and mutual releases; and (xii) the Contributor Consideration Shares, when issued on Closing, shall be validly issued and free and clear of all encumbrances, except for such resale and escrow restrictions imposed by the Exchange and applicable securities laws.

 

As the proposed Transaction is not a “Non-Arm’s Length Qualifying Transaction” (within the meaning of Policy 2.4), the Transaction does not require the approval of the shareholders of HVII.

 

Closing Date

 

In accordance with the Definitive Agreement, the closing date of the Transaction will be the date which is five business days following the satisfaction or waiver of all of the conditions precedent set forth in the Definitive Agreement, and which date shall be no later than 5:00 p.m. (Vancouver time) on April 30, 2024, or such other date as may be agreed to in writing by the parties to the Definitive Agreement.

 

About HVII (TSXV: HVII.P)

HVII is a corporation incorporated under the laws of the Province of British Columbia and is a “reporting issuer” in the Provinces of British Columbia, Alberta and Ontario. HVII was incorporated on January 24, 2022 pursuant to the provisions of the BCBCA.

 

HVII is a “capital pool company” (within the meanings of the policies of the TSXV, including Policy 2.4). HVII has not commenced commercial operations and has no assets other than a minimum amount of cash. Except as specifically contemplated in Policy 2.4, until the completion of a Qualifying Transaction (as defined in Policy 2.4), HVII will not carry on any business other than the identification and evaluation of companies, business or assets with a view to completing a proposed Qualifying Transaction.

 

About Predictive Technologies, LLC

Predictive is a technology company which develops and implements state-of-the-art artificial intelligence capabilities which are delivered through a software-as-a-service (“SaaS”) business model. These technologies are built on 7 years of dedicated research and development. Customers can utilize the Predictive’s artificial intelligence (“AI”) technologies in their own businesses without having to invest in the infrastructure and expertise to develop these capabilities themselves. They include, amongst others, services such as automated data analytics, natural language processing, predictive modelling, image and video analytics, and assistance and advisory function. Predictive markets its AI technologies under the name “Qeleo”.

 

Predictive is a limited liability company existing under the laws of Colorado, United States, which was formed on September 16, 2016. Predictive currently has operations is each of New York, Texas, Washington D.C., Florida, California, Massachusetts, Maryland and Colorado.

 

Upon closing of the Transaction, it is expected that no other person will own, direct, or control, directly or indirectly, 10% or more of the issued and outstanding Resulting Issuer Shares other than as disclosed below:

 

Name of Shareholder and Jurisdiction of Residence or Incorporation	Number of Resulting Issuer Shares	Percentage of Issued and Outstanding – Non-Diluted	Percentage of Issued and Outstanding – Fully Diluted
Wing Enterprises, LLC(1) Idaho, USA	13,124,905	15.3%	14.4%
Tarka L’Herpinière United Kingdom	11,012,682	12.8%	12.1%
Laura Carey USA	13,671,776	15.9%	15.0%
1093682 B.C. Ltd.(2) British Columbia, Canada	13,897,626	16.2%	15.2%

Note:

(1)        Mike Wing is the controlling shareholder of Wing Enterprises, LLC

(2)       Gary Handley and James MacIntosh are the controlling shareholders of 1093682 B.C. Ltd.

Summary of Certain Historical Financial Information of Predictive

 

A summary of certain historical financial information for Predictive is included in the table below:

 

Expressed in United States dollars	As at September 30, 2023 (Unaudited)	As at Year Ended December 31, 2022 (Audited)	As at Year Ended December 31, 2021 (Audited)
Total Revenues	$581,461	$603,523	$523,434
Loss from Operations	$(1,250,849)	$(788,326)	$(113,566)
Net Income (or loss)	$(1,325,000)	$(826,187)	$(141,161)
Total Assets	$530,375	$597,482	$437,764
Total Liabilities	$(1,179,208)	$(1,829,584)	$(852,579)
Cash Dividends Declared	Nil	Nil	Nil

 

Proposed Directors and Senior Management Team

 

The parties also anticipate that in conjunction with and upon Closing, all of the directors and officers of HVII will resign and the Resulting Issuer’s board of directors will consist of no fewer than four (4) directors, being Tarka L’Herpiniere, Mike Wing, Andrew Gertler and Brian Morales. The executive officers of the Resulting Issuer will be appointed by Predictive and are expected to include Tarka L’Herpiniere as Chief Executive Officer, Scott Davis as Chief Financial Officer and Mike Wing as Chief Operating Officer.

The following are brief biographies of the currently proposed directors and executive officers of the Resulting Issuer following the Transaction:

 

Tarka L’Herpiniere,Chief Executive Officer and Director

 

Tarka L’Herpiniere, CEO, CTO and a co-founder of Predictive, has been a force in leading Predictive’s technology trajectory and overarching strategic plans. Possessing a rich background as a leading software engineer and computer scientist with a focus on artificial intelligence, he has been pivotal in establishing Predictive as a leader in the field of artificial intelligence. Mr. L’Herpiniere’s personal achievements, including two Guinness World Records for exploration, mirror his professional trait of pushing boundaries. Mr. L’Herpiniere’s vision and thoughtful strategies have built a strong foundation for Predictive, ensuring the company's continued commitment to technology innovation and growth.  It is expected that Mr. L’Herpiniere will be the Chief Executive Officer and a director of the Resulting Issuer.  

 

Mike Wing,Chief Operating Officer, Corporate Secretary and Director

 

As a co-founder and Chief Operations Officer of Predictive, Mike Wing oversees Predictive’s global operations with strategic precision. His central role in managing Customer Relations Management (CRM) threads the link for above-standard client relationships. Building on his experiences in customer success, Mr. Wing curates effective post-sale teams, striking a balance between customer retention and growth. His management acumen is reflected in numerous successful project associations with industry leaders, including Amazon HQ, Nike HQ Campus, and Ohio State University. Mr. Wing brings to Predictive his drive and dedication that extends beyond his professional role. His commitment to maintaining a work-life balance allows him to bring a fresh, balanced perspective to his work, ensuring that Predictive stays future-focused and ready to innovate in the AI industry.  It is expected that Mr. Wing will be the Chief Operating Officer, Corporate Secretary and a director of the Resulting Issuer.  

 

Scott Davis,Chief Financial Officer

Scott C. Davis, CPA, CGA, offers robust expertise in the financial management landscape, harnessing his breadth of experience in accounting for a variety of market sectors. Serving as a Partner at Cross Davis & Company LLP since July 2010, he provides Predictive with an array of financial services including CFO solutions. His prior role as the Assistant Financial Controller at Appleby in the Cayman Islands from October 2006 to January 2010 allowed him to manage essential financial reporting and budgeting operations. Mr. Davis’ keen sense of financial strategy was further sharpened at Davidson & Company LLP, where his auditing roles catered to public market entities in North America, and at Pacific Opportunity Capital Ltd., where he oversaw client finances across several sectors. With a professional certification from the Certified General Accountants Association of British Columbia and a Diploma in Financial Management from the British Columbia Institute of Technology, Mr. Davis fortifies Predictive’s financial framework, ensuring precision, compliance, and a trajectory toward sustained growth and success within the AI technology sector.  It is expected that Mr. Davis will be the Chief Financial Officer of the Resulting Issuer.

 

Andrew Gertler,Director

 

Andrew Gertler brings a wealth of insight to his role as a board director, drawing on a 40-year career in business with a specialized focus on alternative investments, including real estate and distressed debt. His expertise was honed through leadership positions and as an advisor to noteworthy Canadian firms and family businesses. During his time as Senior Vice President at Hudson Advisors, he handled acquisitions and underwritings for the multi-billion-dollar Lone Star Opportunity Fund, overseeing major transactions in North American real estate and distressed assets. Spanning beyond real estate, Mr. Gertler has led successful engagements in IPOs, mergers, and acquisitions, and has held executive posts such as CEO of a digital media enterprise and CFO of an online news company. His management of alternative investments has included strategically navigating venture capital, leveraged and management buyouts, aligning with institutions like Morgan Stanley and Goldman Sachs. As a co-founder of Viscount Mining, he raised significant capital for mineral exploration and was integral in Sinomar Capital's alliance with Hunt Mining. Mr. Gertler’s dynamic leadership at Lester Asset Management and multiple board positions highlight his strategic prowess and consulting savvy. With degrees from McGill and Western Ontario, his top tier educational foundation amplifies his business acumen, delivering a substantial edge to the Predictive team.  It is expected that Mr. Gertler will be an independent director of the Resulting Issuer.

 

Brian Morales,Director

As a CPA, CA, Brian Morales brings over two decades of extensive financial expertise to his role as a director of Predictive. Mr. Morales has effectively overseen the financial divisions of several publicly listed mining exploration and development companies, as well as financial technology firms from 2010 to 2017. Currently, Mr. Morales continues to work as a finance consultant and serves as a director for multiple reporting issuers. His vast experience includes taking companies public on various international stock exchanges, encompassing markets in Canada, the US, and England. Commencing his career at Ernst & Young LLP, Mr. Morales has embarked on a successful finance journey, which includes a role as an equity research analyst with Credit Suisse. His expertise and leadership ensure the adept oversight of financial strategies at Predictive.  It is expected that Mr. Morales will be an independent director of the Resulting Issuer.

 

Concurrent Financing

 

In conjunction with, and prior to the Closing, Predictive intends to complete a brokered private placement through Finco of subscription receipts (“Subscription Receipts”) at a price of C$0.35 per Subscription Receipt for gross proceeds of C$3,000,000 (the “Concurrent Financing”). Each Subscription Receipt shall, upon satisfaction of certain conditions, convert into one Finco Share and one-half of one warrant to purchase a Finco Shares (each whole warrant, a “Finco Warrant”), with each Finco Warrant to entitle the holder to acquire one Finco Share at an exercise price of C$0.50 for a period of 24 months following the Closing. Pursuant to the Transaction, each Finco Share will be exchanged for one Resulting Issuer Share, and each Finco Warrant will be exchanged for one warrant to purchase a Resulting Issuer Share, on the same economic terms as the Finco Warrant. The Concurrent Financing is being led by CanaccordGenuity Corp. (the “Lead Agent”). The Lead Agent reserves the right to invite one or more investment dealers to form a syndicate of agents (collectively, the “Agents”).

 

In connection with the Concurrent Financing, FinCo will pay the Agents a cash commission equal to 7% of the gross proceeds from the Concurrent Financing, subject to a reduced commission of 3.5% for certain subscribers on a president’s list of FinCo (the “President’s List”), and issued compensation warrants (“Broker Warrants”) exercisable for Resulting Issuer Shares equal to 7% of the number of Subscription Receipts sold under the Concurrent Financing, subject to a reduced percentage of 3.5% for certain subscribers on the President’s List. Each Broker Warrant entitles the holder to acquire one (1) Resulting Issuer Share at an exercise price of $0.50 for a period of 24 months from the date of the closing of the Transaction. Additionally, FinCo has granted the Agents an over-allotment option, exercisable for a period of 30 days from and including the date of the closing of the Concurrent Financing, to purchase up to an additional 15% of the aggregate Subscription Receipts to be sold pursuant to the Concurrent Financing.

 

All ofthe securities issued pursuant to the Concurrent Financing will be subject to a resale restriction under applicable Canadian securities laws. Upon closing of the Transaction, subject to compliance with Canadian securities laws and any escrow restrictions imposed by the Exchange, it is expected that each Resulting Issuer Share issued in exchange for one Finco Share will be free and clear of any resale and escrow restrictions under applicable Canadian securities laws or the rules and policies of the Exchange.

 

Following completion of the Concurrent Financing, it is intended that the net proceeds from the Concurrent Financing will be used for working capital and general corporate purposes. There may be purposes where, for sound business reasons, the net proceeds are reallocated for different purposes.

 

Filing Statement

 

In connection with the Transaction and pursuant to the requirements of the Exchange, Hopefield intends on filing a filing statement on its issuer profile on SEDAR+ (www.sedarplus.ca), which will contain relevant details regarding the Transaction, Hopefield, Predictive and the Resulting Issuer.

 

Trading Halt

 

Trading in securities of a capital pool company should be considered highly speculative. Trading has been haltedfor the HVII Sharesin accordance with TSXV policies and will remain halted pending the TSXV’s review of the Transaction, completion of various regulatory filings with the TSXV in connection therewith, and satisfaction of other conditions of the TSXV for the resumption of trading. Trading inHVIIShares may not resume before the Closing.

 

Bridge Loan

 

Prior to the date hereof, HVII has made a cash advance to Predictive in the amount of C$25,000 as permitted by Section 8.5 of Policy 2.4, which cash advance was evidenced by a promissory note.

 

Further Information

 

All information contained in this press release with respect to HVII, Predictive and the Resulting Issuer was supplied by the applicable party for inclusion herein, without independent review by the other parties, and each party and its directors and officers have relied on the other parties for any information concerning the other parties.

 

Completion of the Transaction is subject to a number of conditions, including but not limited to,Exchangeacceptance. There can be no assurance that the Transaction will be completed as proposed or at all.

 

Investors are cautioned that, except as to be disclosed in the filing statement to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of HVII should be considered highly speculative.

 

The TSX Venture Exchange Inc. has in no way passed upon the merits of the Transaction and has neither approved nor disapproved the contents of thispressrelease.

 

This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United StatesSecurities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to or for the account or benefit of U.S. persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

 

Contact Information

 

Hopefield Ventures Two Inc.

Suite 2200 – 885 West Georgia Street

Vancouver, B.C. V6C 3E8

 

Attention: Mark Binns, Chief Executive Officer

Telephone: [phone]

Email: [e-mail]

Cautionary Statement Regarding Forward-Looking Information

This pressrelease contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking information”) within the meaning of Canadian securities legislation. Forward-looking information generally refers to information about an issuer’s business, capital, or operations that is prospective in nature. Any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward-looking information. Forward-looking information is often identified by terms such as “may”, “should”, “anticipate”, “would”, “will”, “estimates”, “believes”, “intends” “expects” and similar expressions which are intended to identify forward-looking information. More particularly and without limitation, this press release contains forward-looking information concerning (a) the Transaction, (b) the Consolidation (including its timing), (c) the Name Change (including its timing), (d) the Concurrent Financing (including the size and timing associated with completing such financing and the conversion of the Subscription Receipts and Broker Warrants), (e) any resale or escrow restrictions on the Resulting Issuer Shares exchanged for the Finco Shares; (f) the expected composition of the board and management of directors of the Resulting Issuer following the Transaction, (g) the completion and timing of board, securityholder and regulatory approvals, including the application to and approval by the TSXV in respect of the Transaction, (h) the proposed structure of the Transaction, (i) the ability of HVII and Predictive to meet the conditions of the Transaction and the timing for completing the Transaction, (j) the timing for meeting the terms and conditions of the Definitive Agreement, (k) the preparation and delivery to securityholders of a filing statement and the timing associated with its preparation and delivery to securityholders, (l) trading in HVII’s common shares and when such trading will resume, if at all, and (m) certain financial information and forecasts.

The Company cautions that all forward-looking information is inherently uncertain, and that actual performance may be affected by a number of material factors, assumptions and expectations, many of which are beyond the control of HVII and Predictive, including expectations and assumptions concerning HVII, Predictive, Finco, HVII SubCo, the Consolidation, the Name Change, the Concurrent Financing, the Transaction, the timely receipt of all required shareholder and regulatory approvals (as applicable), including the acceptance of the TSXV, the satisfaction of other closing conditions in accordance with the terms of the Definitive Agreement, as well as other risks, uncertainties, and assumptions, including but not limited to assumptions regarding prevailing market conditions and general business, economic, competitive, political and social uncertainties to develop the forward-looking information in this pressrelease. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. There can be no assurance that the Transaction will be completed in its entirety or at all. Investors are cautioned that any information released or received with respect to, among other matters disclosed in this press release, the Consolidation, the Name Change, the Concurrent Financing, and/or the Transaction may not be accurate or complete and should not be relied upon. Such forward-looking information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking information contained in this press release is expressly qualified by this cautionary statement.

The forward-looking information contained in this press release are made as of the date of this press release, and HVII does not undertake any obligation to update publicly or to revise any of the included forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities laws.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.

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 of this release.

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