/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
TORONTO, Oct. 30, 2020 /CNW/ – This press release is being issued pursuant to National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issuers in connection with the filing of an Early Warning Report regarding the conversion and sale of securities of Inscape Corporation (the “Corporation“), an Ontario corporation with its securities trading on the Toronto Stock Exchange under the symbol “INQ”.
Share Conversion
On October 30, 2020, pursuant to the articles of the Corporation and a stock control agreement dated December 9, 1997 among the Corporation, Bhayana Management Ltd. (“Bhayana Management“), Madan Bhayana, and CIBC Mellon Trust Company (the “Stock Control Agreement“), Bhayana Management exercised its right to convert 3,345,881 Class A Multiple Voting Shares of the Corporation (“Multiple Voting Shares“), being all of the issued and outstanding Multiple Voting Shares, into Class B Subordinated Voting Shares of the Corporation (“Subordinated Voting Shares“), on the basis of one Subordinated Voting Share for each Multiple Voting Share converted (the “Conversion“).
Immediately prior to the Conversion, Bhayana Management, together with its affiliates, held 3,345,881 Multiple Voting Shares, representing 100% of the Corporation’s issued and outstanding Multiple Voting Shares, and 3,541,100 Subordinated Voting Shares, representing approximately 32.1% of the Corporation’s issued and outstanding Subordinated Voting Shares. After giving effect to the Conversion, Bhayana Management, together with its affiliates, holds 6,886,981 Subordinated Voting Shares, representing approximately 47.9% of the Corporation’s issued and outstanding Subordinated Voting Shares. As a result of the Conversion, all of the issued and outstanding Multiple Voting Shares have now been converted to Subordinated Voting Shares and there are no longer any issued and outstanding Multiple Voting Shares.
Immediately prior to the Conversion, Bhayana Management, together with its affiliates, held 83.2% of the total outstanding votes of Inscape. After giving effect to the Conversion, Bhayana Management, together with its affiliates, holds 47.9% of the total outstanding votes of Inscape.
Share Purchase Agreement
Concurrently with the Conversion, Bhayana Management and The Madan and Raksha M. Bhayana Family Foundation (collectively, the “Vendors“) entered into a definitive purchase agreement (the “Purchase Agreement“) with Pender Growth Fund Inc. (the “Purchaser“) pursuant to which the Purchaser will purchase from the Vendors an aggregate of 6,886,981 Subordinated Voting Shares for $0.65 per Subordinated Voting Share, representing an aggregate purchase price of $4,476,537.65 (the “Transaction“).
Pursuant to the terms of the Purchase Agreement, the purchase of the 6,886,981 Subordinated Voting Shares will be completed in two separate closings, which are expected to occur on or before November 3, 2020.
Upon completion of the Transaction, each of Bhayana Management and The Madan and Raksha M. Bhayana Family Foundation will no longer hold any Subordinated Voting Shares or Multiple Voting Shares.
Bhayana Management converted the Multiple Voting Shares into Subordinated Voting Shares for liquidity reasons and entered into the Purchase Agreement in order to dispose of its entire interest in the Corporation. Bhayana Management may from time to time acquire additional securities of the Corporation in accordance with applicable securities laws.
A copy of the Early Warning Report disclosing the transaction can be obtained on SEDAR at (www.sedar.com) or from Bhayana Management at 72 Fairway Heights Drive, Thornhill, Ontario L3T 3A9.
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