First Light Capital Signs Loi to Acquire 100% of Vmobo Inc., for Proposed Qualifying Transaction

vMobo, With Leading South Asian Content Channels and Integrated E-Marketplace Seeks Public Listing and USD$5,000,000 Financing to Capture Growing Demand for Targeted Content and Increasing Spending Trends Within the Global Affluent South Asian Community

VANCOUVER, BC / ACCESSWIRE / January 9, 2019 / (TSX-V:XYZ.P) First Light Capital Corp. ("First Light" or the "Company"), announces that it has entered into a letter of intent dated December 19, 2019 (the "LOI") with vMobo Inc. ("vMobo"), whereby First Light will acquire all of the issued and outstanding securities of vMobo by way of a share exchange or such other form of business combination as the parties to the LOI may determine. The LOI was negotiated at arm's length and is not a ‘Non-Arm's Length Qualifying Transaction'. 

The Company is classified as a capital pool company pursuant to Policy 2.4 of the TSX Venture Exchange (the "TSX-V"). Upon successful completion of the proposed acquisition of the securities of vMobo (the "Transaction"), it is anticipated that the Company will be listed as a Tier 2 Technology issuer on the TSX-V and will carry on the business of vMobo. The Transaction is anticipated to constitute the Qualifying Transaction of the Company, as such term is defined in the policies of the TSX-V.

Pursuant to the terms and conditions of the LOI, the Company and vMobo will negotiate and enter into definitive agreements (the "Definitive Agreements") incorporating the principal terms of the Transaction as described in this press release. The precise structure of the Transaction will be mutually determined with regard to relevant financial, tax and securities law considerations and the final terms and structure of the Transaction will be reflected in the Definitive Agreements. There is no assurance that the Definitive Agreements will be successfully negotiated or entered into.

Transaction Summary

The LOI anticipates that the Transaction will be effected by way of a three-cornered amalgamation of vMobo and a wholly-owned subsidiary of the Company to be incorporated in British Columbia, or other similar form of transaction as is acceptable to the parties.

It is currently proposed that First Light will issue common shares in its capital ("First Light Shares") to the holders of common shares in the capital of vMobo ("vMobo Shares") on the basis of one First Light Share for each vMobo Share, following a consolidation of the vMobo Shares on a 3.08:1 basis (the "vMobo Consolidation") and a consolidation of the First Light Shares on a 2.39:1 basis (the "XYZ Consolidation" and together with the vMobo Consolidation, the "Consolidations"). It is anticipated that approximately 42.1 million post XYZ Consolidation First Light Shares will be issued pursuant to the Transaction based on the current capital structure of vMobo, having regard for the Consolidations, the Unit Financing and the Convertible Debenture Financing. The Transaction is an arm's length transaction. Upon the completion of the Transaction, it is expected that vMobo will become a wholly owned subsidiary of the Company. 

The Transaction is subject to a number of terms and conditions, including, but not limited to, the parties entering into the Definitive Agreements on or before March 31, 2020 (such agreements to include representations, warranties, conditions and covenants typical for a transaction of this nature), the completion of satisfactory due diligence investigations, the closing of the private placements of Units and Debentures and if applicable the Bridge Loan (all as defined below) for gross proceeds of up to US$5,000,000, both as further described below, and the approval of the TSX-V and other applicable regulatory authorities. 

The Company currently has 12,500,000 First Light Shares issued and outstanding, as well as 250,000 stock options and 300,000 broker warrants to acquire First Light Shares, each exercisable at CAD$0.10 per share. 

About vMobo Inc.

vMobo is a private company incorporated in California, USA in 2008 which operates two leading content channels and an integrated lifestyle e-marketplace that serves the fast growing, global affluent South Asian community. 

The South Asian consumer spends on aspirational and experiential products across all Lifestyle categories and remain one of the few untapped market segments. Approximately 65 million wealthy Indians in India, 65 million South Asians and the culturally open in North America and over 32 million South Asian migrants across the globe constitute the world's 14th largest economy as a virtual country.

vMOBO operates vClusive, a unique lifestyle e-marketplace enabling its members to purchase aspirational luxury products, services and lifestyle experiences. It integrates its merchant partners brands through marketing, product placement, and advertising throughout its content channels, GoodTimes and PanDesi driving additional e-marketplace revenue. vClusive currently has over 270,000 members and over 250 merchant partners and brands as well as an app available on the App and Play stores. 

GoodTimes is an Indian produced, English-language lifestyle content channel with a reach of over 80 million viewers. 

PanDesi is an American produced, English-language lifestyle content channel targeting over 74 million American Desis and culturally open Americans.

For the period of April 1, 2019 to September 30, 2019, vMobo had approximately US$3,020,000 in revenue (unaudited) and US$791,000 of net operating loss (unaudited).

Management and Board of Directors of Resulting Issuer

All of the current members of the Company board of directors will resign and nominees of vMobo will be appointed as management and directors of the listed issuer resulting from the Transaction (the "Resulting Issuer").

Private Placements 

Pursuant to the LOI, it is a condition of the Transaction that vMobo completes certain financings, with the assistance of First Light and certain agents to raise a minimum of US$5,000,000 as follows: (a) US$1,200,000 in the form of a convertible debentures financing (the "Convertible Debenture Financing") of which the insiders of vMobo have agreed to subscribe for an aggregate of US$300,000 of the Convertible Debenture Financing; and (b) US$3,800,000 in the form of an offering of units (each, a "Unit"), at a price of CAD$0.55 per Unit, pursuant to a prospectus to be filed by the Company (the "Unit Financing") of which the insiders of vMobo have agreed to subscribe for an aggregate of US$950,000 of the Unit Financing. The Company and vMobo will engage Gravitas Securities Inc., as lead agent and bookrunner in relation to both the Convertible Debenture Financing and the Unit Financing, who will be compensated for its services as agent on terms to be determined.

The Convertible Debenture Financing

The Convertible Debenture Financing will consist of the sale of 1,200 convertible debentures (the "Debentures") at a price of US$1,000 per Debenture. Each Debenture will consist of one 12.0% senior secured convertible debenture of vMobo in the principal amount of US$1,000, with interest payable semi-annually in arrears on June 30 and December 31 of each year, subject to abatement pending completion of the Transaction and maturing two years from the date of issuance (the "Maturity Date"). In the event the Transaction is not completed within 12 months of the issuance of the Debentures, such Debentures and any interest earned pursuant thereto will be repaid in cash immediately. 

The Debentures will be secured by a general security agreement over the assets of vMobo. The Debentures will be repaid in cash at maturity, and will be convertible, at the option of the holder of the Debentures into units ("vMobo Units") at any time prior to the Maturity Date, at a conversion price of CAD$0.45 per vMobo Unit, subject to adjustment in certain events. Each vMobo Unit will be comprised of the equivalent of one common share of the Resulting Issuer and one share purchase warrant exercisable into common shares of the Resulting Issuer at a price of CAD$0.75 per share for a period of 36 months. 

If vMobo is unable to raise an aggregate of US$1,200,000 under the Convertible Financing, the Company will account for the shortfall by providing a loan secured against all the assets of vMobo in an amount not exceeding CAD$225,000, in accordance with the policies of the TSX-V (the "Bridge Loan").

The Unit Financing

The Unit Financing will consist of approximately 9,090,909 Units priced at CAD$0.55 per Unit. Each Unit will consist of one common share of the Resulting Issuer and one share purchase warrant of the Resulting Issuer (each a "Warrant"). Each Warrant will be exercisable into a further common share of the Resulting Issuer at a price of CAD$0.75 per share for a period of 36 months. The Warrants will be subject to an acceleration clause such that if on any 10 consecutive trading days, the closing price of the Resulting Issuer's shares is greater than CAD$1.10 per share, the term of the Warrants will be accelerated to a period of 30 days following the issuance of notice by the Company of its intention to exercise such acceleration right. 

vMobo intends to use the net proceeds of the Unit Financing and the Convertible Debenture Financing to fund the Transaction, to develop its business and for working capital and general corporate purposes. 

Finder's fees may be payable in connection with the Transaction, the Convertible Debenture Financing and the Unit Financing. 

This news release does not constitute an offer to sell and is not a solicitation of an offer to buy any securities in the United States. The securities of the Company and vMobo have not been and will not be registered under the United States Securities 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 U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws unless pursuant to an exemption from such registration.

Shareholder Approval Not Being Sought 

As the Company is a CPC, the Transaction is not a "Non-Arm's Length Qualifying Transaction" (as defined in the rules and policies of the TSX-V) and and no aspect of the Transaction requires the approval of shareholders of First Light under applicable corporation and securities legislation, subject to the consent of the TSX-V, First Light will not seek shareholder approval to complete the Transaction.

Sponsorship

The Transaction is subject to the sponsorship requirements of the TSX-V, unless a waiver from those requirements is granted. There can be no assurance that a waiver will be obtained and, if a waiver from the sponsorship requirements is not obtained, a sponsor will be identified at a later date. An agreement to act as sponsor in respect of the Transaction should not be construed as any assurance with respect to the merits of the Transaction or the likelihood of its completion.

Trading Halt

Trading in the First Light Shares has been halted as of December 23, 2019 and will remain halted pending the satisfaction of all applicable requirements pursuant to Policy 2.4 of the TSX-V. It is not anticipated that trading of First Light Shares will resume prior to the completion of the Transaction.

The Company will issue further press releases regarding the Transaction as information becomes available.

Name Change

Upon completion of the Transaction, the Company intends to change its name to such name as vMobo and the Company may determine, and the parties expect that the TSX-V will assign a new trading symbol for the Resulting Issuer

All sales, exchanges, and issuances of any securities in connection to the Transaction will be subject to regulatory and corporate approval including, but not limited to, the approval of the TSX-V.

On behalf of the board of directors of the Company:

Neil Currie
Chief Executive Officer, Chief Financial Officer and Corporate Secretary

For more information please contact:

Kin Communications Inc.
604-684-6730

Neither the TSX-V nor its Regulation Services Provider (as that term is defined in the policies of the TSX-V) accepts responsibility for the adequacy or accuracy of this release.

All information contained in this news release relating to vMobo was provided by vMobo to the Company for inclusion herein..

Completion of the Transaction is subject to a number of conditions, including but not limited to, TSX-V acceptance and if applicable pursuant to TSX-V requirements, majority of the minority 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 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 TSX-V has in no way passed upon the merits of the Transaction and has neither approved nor disapproved the contents of this news release.

Forward-Looking Statements

This news release contains statements which constitute "forward-looking information" within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs and current expectations of the Company and vMobo with respect to future business activities and operating performance. Forward-looking information is often identified by the words "may", "would", "could", "should", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" or similar expressions and includes information regarding: (i) expectations regarding whether the Transaction will be consummated, including whether conditions to the consummation of the Transaction will be satisfied including, but not limited to, the necessary board, shareholder and regulatory approvals and the timing associated with obtaining such approvals, if at all; (ii) the timing for completing the Transaction, if at all; (iii) the timing associated with entering into the Definitive Agreements and the terms and conditions therein; (iv) the business plans and expectations of the Company and vMobo; (v) the development of vMobo's products and services; (vi) the ability of vMobo to secure funding; (vii) trading in the First Light Shares and when such trading will resume, if at all; (viii) the completion of and the issuance of securities under the Convertible Debenture Financing and the Unit Financing; (ix) the issuance of and timing associated with issuing a further comprehensive news release or news releases; and (x) expectations for other economic, business, and/or competitive factors. 

Investors are cautioned that forward-looking information is not based on historical facts but instead reflect the Company and vMobo's respective management's expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although the Company believes that the expectations reflected in such forward-looking information are reasonable, such information involves risks and uncertainties, and undue reliance should not be placed on such information, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the Resulting Issuer. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking information are the following: the ability to consummate the Transaction; the ability to obtain requisite regulatory and shareholder approvals and the satisfaction of other conditions to the consummation of the Transaction on the proposed terms and schedule; the potential impact of the announcement or consummation of the Transaction on relationships, including with regulatory bodies, employees, suppliers, customers and competitors; changes in general economic, business and political conditions, including changes in the financial markets; the development of vMobo's business and its ability to secure funding; and the diversion of management time on the Transaction. This forward-looking information may be affected by risks and uncertainties in the business of vMobo and the Company and market conditions. 

Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although vMobo and the Company have attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended and such changes could be material. vMobo and the Company do not intend, and do not assume any obligation, to update this forward-looking information except as otherwise required by applicable law.

SOURCE: First Light Capital Corp.

ReleaseID: 572974