Nextech AR Solutions Corp. (CSE:NTAR, OTCQB:NEXCF) said it has entered into an arrangement agreement with its wholly-owned subsidiary 1000259749 Ontario Inc (Spinco) and a special purpose financing company 1373222 B.C. Ltd (FinanceCo), to spin out its ARway platform and associated assets to Spinco.
“This spin-off transaction is quickly moving forward and will give Nextech shareholders ownership in yet another exciting public company with a spatial computing platform, which I believe, is perfectly positioned for growth in the rapidly emerging Web3.0 world,” Nextech CEO Evan Gappelberg said in a statement.
“Once approved, this Spinco will be another major milestone for Nextech and its valued shareholders. This transaction is anticipated to enable the realization of the true potential of ARway assets under a highly experienced and focused management team, unlocking the true value of our real-world Spatial Computing platform,” he added.
READ: Nextech AR launches upgrades to its spatial mapping platform, ARway
Nextech said it will receive an aggregate of 16,000,000 common shares of Spinco with an aggregate of 4,000,000 Spinco shares being distributed directly to the shareholders of Nextech on a pro-rata basis, among others, if the arrangement is completed. It intends to transfer an aggregate of 3,000,000 of the 16,000,000 Spinco shares to certain service providers in consideration of past services and other indebtedness.
Spinco intends to seek a listing of its common shares on the Canadian Securities Exchange (CSE) following the completion of the arrangement, it added.
ARway allows creators to map, author and publish various Metaverse experiences, ranging from wayfinding to an array of AR experiences for exclusive branded activations.
“After 16 years of walking around with a smartphone in our pockets, the next generation of devices is about to emerge in the form of Computer glasses. Computer glasses will become the device of choice for spatial commuting and the spatial web, which is the next evolution of our computer-driven world,” CEO Gappelberg said.
“I believe it will become a major focus of investors when Apple (NASDAQ:AAPL) Computer releases a pair of computer glasses, which is widely anticipated and expected to happen in the next 12 months. Once fully launched, ARway, spatial computing and the spatial web will have unlimited potential and use cases including for healthcare, education, sports venues, hospitals, campuses, trade shows, theme parks, airports, museums, warehouse wayfinding, entertainment forever changing our world into a metaverse with spatially aware computers," he added.
The Spinco directors and officers are expected to comprise Evan Gappelberg as director and chairman; Paul Duffy as director and president; Belinda Tyldesley as director and corporate secretary; and Andrew Chan as CFO.
Private Placement
Nextech said in connection with the arrangement, FinanceCo will complete a private placement of a minimum of 6,000,000 subscription receipts at a price of C$0.25 each to raise aggregate gross proceeds of a minimum of C$1.5 million for the further development and promotion of the ARway app and for general corporate purposes.
Each subscription receipt will automatically convert upon the satisfaction or waiver of all conditions precedent to the arrangement and certain other ancillary conditions into units at no additional cost to, and without further action by, the holder of the subscription receipt. Each unit will ultimately be comprised of one common share of FinanceCo and one share purchase warrant exercisable to acquire one additional FinanceCo share at an exercise price of C$0.50 three years from the date of issue.
The gross proceeds from the private placement will be held in escrow pending the satisfaction of the release conditions, whereupon the units underlying the subscription receipts will be issued to the purchasers and the gross proceeds of the private placement will be paid to Spinco.
Following the conversion of the subscription receipts, FinanceCo will merge with a wholly-owned subsidiary of Spinco, where all FinanceCo shares and FinanceCo warrants shall be exchanged for equivalent securities of Spinco on a 1:1 basis.
Alternatively, each subscription receipt will terminate on the earlier of 1) the failure to satisfy the Release Conditions prior to 5.00pm (Toronto time) on a scheduled date to be determined; or 2) a public announcement by Nextech prior to the release deadline that it does not intend to satisfy any of the Release Conditions or the release conditions are incapable of being satisfied by the Release Deadline.
The gross proceeds will be returned to the purchasers pro-rata without any deduction or interest on termination of the subscription receipts, which will automatically be cancelled.
Nextech AR said it now expects the private placement to close by August 31, 2022.
The plan of arrangement is subject to approvals, including of the CSE, court and shareholders, and standard closing conditions, it added.
Contact the author at jon.hopkins@proactiveinvestors.com