RE Royalties Ltd Receives Conditional Approval for the Qualifying Transaction with Baetis Ventures

RE Royalties Ltd. (“RER”) and Baetis Ventures Ltd. (TSXV: BATS.P) (“Baetis” or the “Company”), a capital pool company listed on the TSX Venture Exchange Inc. (the “Exchange”) are pleased to announce that the Exchange has granted conditional approval to the reverse-takeover transaction (the “Transaction”) as initially announced by news release dated April 2, 2018. The Transaction will constitute Baetis’ Qualifying Transaction, as defined in Exchange Policy 2.4 – Capital Pool Companies.  The Transaction will be effected by way of a plan of arrangement, whereby Baetis will acquire from the shareholders of RER, 100% of the issued and outstanding common shares of RER and RER will become a wholly owned subsidiary of Baetis.

The Company and RER entered into an Arrangement Agreement on May 31, 2018 which was unanimously approved by the Board of Directors of Baetis and the Shareholders of RER. The Arrangement Agreement initially contemplated completion of the Transaction by August 31, 2018. The Company and RER have agreed to extend the closing date to October 31, 2018 and now expect the Transaction to close by that date.

Background on RE Royalties Ltd.

RER is a corporation registered under the Business Corporations Act (British Columbia) and is based in Vancouver, British Columbia, Canada. RER’s focus is to acquire a portfolio of long-term renewable energy royalty income streams, mainly from projects already in operations or in advanced stages of development. RER’s portfolio currently consists of 11 separate royalties from 473 megawatts of operational and late stage development projects in Canada, USA (Texas) and Europe. RER’s royalties are based on gross revenues, with revenues backed by long-term agreements from investment grade off-takers, and the royalty agreements are typically 20 years in duration. RER’s mandate is to provide shareholders with (1) a strong growing yield (2) robust capital protection (3) high rate of growth through re-investment and (4) a sustainable investment focus. RER has a strong pipeline of projects and management is currently reviewing acquisition opportunities in Europe, Japan and North America.

RER’s royalty financing products provide RER’s partners with a financing alternative that is more flexible than traditional debt and less expensive than traditional equity, similar to other royalty financiers in the oil and gas, and mining industries. The small to mid-cap renewable energy project owner/operators represent a large market niche that is particularly underserved by traditional financial products. Royalty financing allows them to achieve their growth targets without resorting to either dilution or asset sales. RER is a pioneer and leader in providing royalty financing to this rapidly growing and underserved marketplace.

Qualifying Transaction Terms

The Transaction will be effected by way of a plan of arrangement, whereby Baetis will acquire from the shareholders of RER 100% of the issued and outstanding common shares of RER, and RER will become a wholly owned subsidiary of Baetis.

Subject to compliance with Exchange policies, Baetis will complete a consolidation of its common shares at a ratio of three (3) existing common shares for one (1) post-consolidation common share (the “Consolidation”) concurrently with or immediately prior to and as a condition of the closing of the Transaction. The number of common shares issuable on exercise of outstanding Baetis warrants will be adjusted accordingly based on the Consolidation ratio. Following the Consolidation, Baetis will have 1,333,333 common shares outstanding and 66,667 agents’ warrants outstanding with an exercise price of $0.30.

Baetis will acquire from the shareholders of RER all of the issued and outstanding common shares of RER (the “RER Common Shares”) and in consideration therefor, subject to Exchange approval, Baetis will issue to each shareholder of RER one (1) post-Consolidation common share in the capital of Baetis in exchange for each RER Common Share held by such shareholder. In addition, Baetis will issue warrants and options in replacement of warrants and options outstanding in the capital of RER.

RER currently has issued and outstanding: (i) 15,850,189 RER Common Shares; (ii) warrants exercisable for 2,000,000 common shares at $0.50 per share; and (iii) 1,180,000 stock options exercisable at $0.80 per share.

RER will, concurrently with the Transaction, complete a private placement of securities, subject to the approval of the Exchange, for gross proceeds in the minimum amount of $5,000,000 and a maximum of $20,000,000, at $1.00 per common share (the “RER Private Placement”). The RER Private Placement may be brokered or non-brokered. In the event that the RER Private Placement is brokered, the agent retained by RER will be paid customary compensation for such agency services, including finder’s warrants. The proceeds from the RER Private Placement will be used: (a) to fund the business of RER; (b) to pay for Transaction expenses; and (c) for general working capital purposes. RER anticipates the RER Private Placement will be closed by the end of September.

Baetis will also complete a non-brokered private placement, of post-Consolidated common shares at $1.00 per share, subject to the approval of the Exchange, for gross proceeds in the minimum amount of $275,000 (the “Baetis Private Placement”). The purpose of the Baetis Private Placement is to allow investors to participate via their registered investment accounts. Any common shares issued pursuant to the Baetis Private Placement will be subject to a mandatory hold period which will expire four months after closing of the Baetis Private Placement. Finder’s fees may be paid on a portion of the Baetis Private Placement, including the issuance of finder’s warrants.

Upon completion of the Transaction, the board of Resulting Issuer will be increased to seven members, six of whom will be nominated by RER, and one of whom will be nominated by Baetis. The directors and officers of the Resulting Issuer will be:

1)  Bernard Tan – CEO and Director

Mr. Tan is the founder of RER and former Chief Financial Officer of Hunter Dickinson Inc. (HDI), where he managed diverse teams in the strategic development and execution of new opportunities for HDI, and provided financial oversight and governance on HDI’s portfolio of companies (up to $2bn). He is also the former CFO of Curis Resources, a TSX publicly listed entity. He has over 15 years of experience in corporate finance in resource and technology and is a Recipient of Young Mining Leader award from Canadian Institute of Mining, Metallurgy & Petroleum. Mr. Tan is a CPA, CA and has a MBA (Finance) from McGill University and BComm from the University of British Columbia.

2)  Peter Leighton – COO

Mr. Leighton is a co-founder of RER. Mr. Leighton is an experienced renewable energy executive with 20+ years of experience in mergers & acquisitions and project development in the energy sector. He is the former President and Chief Operating Officer of Finavera, where he delivered $750 million worth of wind energy projects. Mr. Leighton is the former Chief Operating Officer of Accenture’s Business Services for Utilities and was a director of Clean Energy B.C. (from 2010 to 2016), and a director of Health Shared Services of British Columbia (from 2008 to 2018). Mr. Leighton has a BSc from Queens and MBA from University of British Columbia.

3)  Marchand Snyman – Chairman and Director

Mr. Snyman is a co-founder of RER. Mr. Snyman has over 20 years of senior executive experience in global corporate finance, M&A, financing and divestiture activities. He also currently serves as a director and officer on a number of publicly traded companies. Mr. Snyman is currently a Director and the Chief Operating Officer of Hunter Dickinson Inc. Mr. Snyman is a Chartered (Australia and New Zealand) and a Chartered Accountant (South Africa).

4)  Stephen Cheeseman – Independent Director

Mr. Cheeseman is the President of Chinook Power, where he identified and developed the 142MW Quality Wind Project. He is a current director of Clean Energy B.C. Mr. Cheeseman is the winner of the Canada Clean16 award for his dedication and contribution to sustainability and clean capitalism.

5)  Rene Carrier – Independent Director

Mr. Carrier is the President of Euro-American Capital Corporation, a private investment company. Mr. Carrier currently serves as an independent director on various publicly traded companies and was a founding director of International Royalty Corp. (“IRC”) from 2003 until sale of IRC for $700 million in 2010.

6)  Gord Fretwell – Independent Director

Mr. Fretwell is a former partner at a large Vancouver law firm. Mr. Fretwell is currently a partner for a boutique law firm in Vancouver practicing primarily in the areas of corporate and securities law. Mr. Fretwell was also a founding director of International Royalty Corp. (“IRC”) from 2003 until sale of IRC for $700 million in 2010.

7)  Jill Leversage – Independent Director

Ms. Leversage is a senior investment banker with over 30 years of executive experience in investment banking and private equity. Ms. Leversage was the former Managing Director, Corporate & Investment Banking for TD Securities, a global investment bank and Former Managing Director at Highland West Capital Ltd., a private equity and merchant bank. She currently serves as a director on various public and private company boards. Ms. Leversage is a Chartered Business Valuator and a Fellow of the Institute of Chartered Accountants of BC.

8)  Paul Larkin – Independent Director

Mr. Larkin is the President of the New Dawn Group, an investment and financial consulting firm primarily involved in corporate finance, merchant banking and administrative management of public companies. Mr. Larkin currently serves as a director on various publicly traded companies and he was a founding director, chairman of the audit and special purpose committees of US Geothermal Inc., a successful NYSE publicly listed renewable energy company that was acquired by Ormat Technologies Inc. in April 2018.

Mr. Paul Larkin, a proposed director of the Company, has entered into agreements to purchase 1,700,000 (pre-Consolidation) previously issued escrowed common shares of Baetis from current directors of the Company. Such agreements are subject to the approval of the Exchange.

In accordance with the policies of the Exchange, the Company intends to pay finders’ fees in connection with the Transaction through the issuance of 200,000 post-Consolidation shares of Baetis.

Trading of Baetis’ common shares will remain halted pending completion of the Transaction, subject to the earlier re-commencement of trading only upon Exchange approval and the filing of required materials with the Exchange as contemplated by Exchange policies.

Completion of the Transaction is subject to a number of conditions, including but not limited to, Exchange final acceptance.

Investors are cautioned that, except as disclosed in the management information circular or 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 a capital pool company 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 that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.

Additional information in connection with the Transaction will be provided in subsequent press releases.

ON BEHALF OF THE BOARD

“Jonathan Younie”

CEO, CFO and Director

Tel: (604) 687-7767, Email: jy@newdawnholdings.com

Contacts for RE Royalties Ltd:

Bernard Tan, Tel: (778) 373-6712, Email: bernardtan@reroyalties.com or

Peter Leighton, Tel: (778) 373-6745, Email: peterleighton@reroyalties.com

Forward-Looking Statements

This press release contains forward-looking information within the meaning of Canadian securities laws. Such information includes, without limitation, information regarding the completion of the proposed Transaction, the proposed Private Placements, and the anticipated business plan of Baetis and RER subsequent to completion of the Transaction. Although Baetis believes that such information is reasonable, it can give no assurance that such expectations will prove to be correct.

Forward looking information is typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or are those, which, by their nature, refer to future events. Baetis cautions investors that any forward-looking information provided by Baetis are not guarantees of future results or performance, and that actual results may differ materially from those in forward looking information as a result of various factors, including, but not limited to: Baetis’s ability to complete the proposed Transaction; the state of the financial markets for Baetis’s equity securities; the state of the market for royalty investments generally by the resulting issuer in the event the Transaction is completed; recent market volatility; Baetis’s ability to raise the necessary capital or to be fully able to implement its business strategies; and other risks and factors that Baetis is unaware of at this time. The reader is referred to Baetis’s most recent annual and interim Management’s Discussion and Analysis for a more complete discussion of all applicable risk factors and their potential effects, copies of which may be accessed through Baetis’s profile on SEDAR at www.sedar.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 release.

Click here to connect with RE Royalties Ltd. for an Investor Presentation. 

Subsequent to this press release, RE Royalties went public on November 13, 2018 under the ticker symbol TSXV:RE

Source: www.fscwire.com