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VANCOUVER, British Columbia, Oct. 18, 2022 (GLOBE NEWSWIRE) -- RSI International Systems Inc. (NEX: RSY.H) (the “Company” or “RSI”) and ARCpoint Group LLC (“ARCpoint”) are pleased to announce that, ARCpoint Finance Corp. (“ARC Finco”), a wholly owned subsidiary of ARCpoint, has completed the previously announced non-brokered private placement (the “Private Placement”) in connection with the previously announced reverse takeover of the Company by the securityholders of ARCpoint (the “Transaction”).
Pursuant to the Private Placement, ARC Finco issued 4,833,742 subscription receipts (“Subscription Receipts”) at a price of $0.45 per Subscription Receipt for aggregate gross proceeds of $2,175,183.90.
The gross proceeds from the Private Placement less 50% of the cash commission (the “Cash Commission”) payable to the finders (the “Finders”) who facilitated the Private Placement (the “Escrowed Funds”) have been delivered to Odyssey Trust Company (“Odyssey”), as subscription receipt agent. The Escrowed Funds will be held by Odyssey until the waiver and/or satisfaction of certain escrow release conditions, including, but not limited to, the completion, satisfaction or waiver of all conditions precedent to the Transaction (other than the release of the Escrowed Funds) and other customary escrow conditions for a transaction of this nature as described in the Company’s press release dated June 29, 2022 (the “Escrow Release Conditions”).
In connection with the Private Placement, ARC Finco is required to pay the Finders Cash Commission in the aggregate amount of $10,203.87. Fifty percent (50%) of the Cash Commission has been paid to the Finders and the remaining fifty percent (50%) of the Cash Consideration has been deposited into escrow and will be released upon satisfaction and/or waiver of the Escrow Release Conditions.
As an additional consideration, the Finders have received 45,351 Compensation Warrants of ARC Finco (“Compensation Options”) in connection with the Private Placement. Each Compensation Warrant will be exchanged for one (1) replacement compensation warrant (each, a “Replacement Compensation Warrant”) of the resulting issuer (the “Resulting Issuer”) upon closing of the Transaction. Each Replacement Compensation Warrant is exercisable to acquire one (1) Class A Subordinate Voting Share of the Resulting Issuer (each, a “Resulting Issuer Share”) at a price of $0.45 per share for a period of two (2) years from the date of issue.
The Private Placement was completed in connection with the Transaction. Upon satisfaction the Escrow Release Conditions, each Subscription Receipt issued pursuant to the Private Placement will be automatically exchanged, without payment of any additional consideration and without further action on the part of the holder thereof, for one common share of ARC Finco (a “Finco Share”) and one half (1/2) of a Finco Share purchase Warrant (each whole warrant, a “Warrant”) with each Warrant exercisable to purchase one (1) Finco Share at an exercise price of $0.675 per share for a term of three (3) years from the date of issue. Upon closing of the Transaction, the Finco Shares and the Warrants will be exchanged for the Resulting Issuer Shares and warrants of the Resulting Issuer with equivalent terms, respectively.
None of the Non-Arm’s Length Parties (such term as defined in the policies of the TSX Venture Exchange (the “Exchange”)) to RSI and ARCpoint participated in the Private Placement, other than John Constantine, Chief Executive Officer and a member of the board of managers of ARCpoint, and Felix Mirando, Executive Vice President and a member of the board of managers of ARCpoint, through a holding company he jointly owned with his children, who have subscribed in aggregate, 989,444 Subscription Receipts for $445,249.80.
The net proceeds raised from the Private Placement will be used by ARCpoint for software development, franchise development, roll out of substance addiction treatment clinics, working capital and general corporate purposes.
The closing of the Transaction is expected to take place on or around October 21, 2022 or such other date as the Company and ARCpoint may agree, subject to a number of previously announced conditions, including, but not limited to, (A) the consolidation of the common shares of the Company on a 2.4930814 to 1 basis, (B) the continuance of the Company’s corporate existence from British Columbia to the federal jurisdiction under Canada Business Corporations Act under the new business name of “ARCpoint Inc.”, (C) the creation of Class A Subordinate Voting Shares (“SVS”) and Class B Proportionate Voting Shares and reclassification of its post-Consolidation common shares of the Company into SVS for the purpose of structuring the resulting issuer of the proposed Transaction as a “foreign private issuer” under applicable U.S. securities laws, and (E) completion and execution of all definitive transaction documents (including accuracy of representations and warranties, compliance of covenants and satisfaction of customary conditions) and receipt of all requisite approvals and consents for and in connection with the proposed Transaction.
About ARCpoint Group LLC
ARCpoint is a leading US-based franchise system providing drug testing, alcohol screening, DNA and clinical lab testing, corporate wellness programs, and employment and background screening, among other services. The company is based in Greenville, South Carolina, USA. ARCpoint Franchise Group LLC, formed under the laws of the state of South Carolina in February 2005, is the franchisor of ARCpoint Labs and supports over 120 independently owned locations. ARCpoint sells franchises to individuals throughout the United States and provides support in the form of marketing, technology and training to new franchisees. ARCpoint Corporate Labs LLC develops corporate-owned labs committed to providing accurate, cost-effective solutions for customers, businesses and physicians. AFG Services LLC serves as the innovation center of the ARCpoint group of companies as it builds a proprietary technology platform and a physician network to equip all ARCpoint labs with best-in-class tools and solutions to better serve their customers. The platform also digitalizes and streamlines administrative functions such as materials purchasing, compliance, billing and physician services for ARCpoint franchise labs and other clients.
For more information, please contact:
RSI International Systems Inc.
Adam Ho, CEO & Director
Phone: (604) 329-1009
Email: [email protected]
ARCpoint Group LLC
John Constantine, CEO & Director
Phone: 864-271-3210
E-mail: [email protected]
Completion of the Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable, disinterested shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the filing statement 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 the Company 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 this news release.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain “forward-looking statements” under applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to: the terms and conditions of the Proposed Transaction and the target closing date of the Transaction. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; delay or failure to receive board, shareholder or regulatory approvals; and the results of operations. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company and ARCpoint disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
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 Press release.
