ADL Ventures Inc. Announces Qualifying Transaction

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TORONTO, Aug. 13, 2019 /CNW/ - ADL Ventures Inc. (TSXV: AVI.P) ("ADL" or the "Company"), a capital pool company as defined under Policy 2.4 – Capital Pool Companies ("CPC") of the TSX Venture Exchange (the "Exchange"), is pleased to announce it has entered into a binding letter of intent dated August 13, 2019 (the "LOI") with Real Technology Broker Ltd. ("Real") a private company incorporated under the laws of Israel, whereby ADL will acquire all of the issued and outstanding securities of  Real by way of a share exchange,  arrangement, amalgamation or similar transaction to ultimately form the resulting issuer (the "Resulting Issuer") who will continue on the business of Real (the "Transaction"), subject to the terms and conditions outlined below. ADL intends that the Transaction will constitute its Qualifying Transaction, as such term is defined in the policies of the Exchange.

Real, is a technology driven national real estate brokerage platform primarily operating in the United States through a network of approximately 1,100 agents. Real has a unique operational model providing teams and agents freedom, flexibility, success tools, long term security and a sense of community to build their reputations and professional assets with the help of a leading edge digital platform built from the ground up for their success.

Summary of the Qualifying Transaction

The LOI contemplates ADL acquiring 100% of the issued and outstanding ordinary and preferred shares of Real, pursuant to which ADL shares  will be issued to holders of shares of Real on the basis of 1.0083 post-Consolidation ADL Shares  for every one Real share (the "Exchange Ratio"), giving effect to a deemed value of $0.25 per ADL Share. Outstanding stock options of Real will be rolled over or exchanged at closing for stock options of ADL at the Exchange Ratio subject to the requirement that the total number of ADL options following the completion of the Transaction will not exceed 10% of ADL's post-closing issued and outstanding common shares.

Final terms of the Transaction will be set out in a definitive agreement between the parties (the "Definitive Agreement"). The Definitive Agreement will contain representations, warranties, conditions and covenants customary for transactions of this nature.

As described below, on completion of the Transaction, the shareholders of Real would own approximately 92% of the issued and outstanding shares of the Resulting  Issuer and existing shareholders of ADL would own approximately 8.0% of the issued and outstanding shares of the Resulting Issuer on a non-diluted basis not including shares issuable on the Private Placement (as defined below). The common shares of the Resulting Issuer will be listed for trading on the Exchange. Further information about the proposed Transaction will be provided in a subsequent news release.

The parties to the Transaction are at arm's length and it is therefore anticipated that the approval of the shareholders of ADL in respect of the Transaction will not be required. The Company does plan to hold a special meeting of shareholders (the "Meeting") whereat, among other things, the shareholders of ADL will be asked to approve: (i) the appointment of a new slate of directors, conditional upon completion of the Transaction; and (ii) the continuance to become a corporation governed by the Business Corporations Act (Ontario).

Private Placement

In connection with the Transaction, it is anticipated that Real will complete a  private placement of Real common shares which may occur in one or more closings prior to or concurrent with the closing of the Transaction. The size of the offering and the issue price at which the Real common shares will be sold are to be determined in the context of the market (the "Private Placement"). Subject to applicable laws and Exchange Policies, it is anticipated that each Real share issued pursuant to the  Private Placement will be exchangeable into freely tradable common shares of the Resulting Issuer upon completion of the Transaction.

The Resulting Issuer

Upon completion of the Transaction the Resulting Issuer is expected to change its name to Real Technology Brokerage Inc. or such other name as determined by Real and the Resulting Issuer will be a technology issuer under the TSX-V Rules. Concurrent with the completion of the Transaction, it is expected that all directors and officers of ADL will resign and be replaced by nominees put forth by Real at the Meeting, except that Mr. Laurence Rose will continue to serve on the Board of the Resulting Issuer. New stock options of ADL will be issued to the new directors elected at the Meeting as well as new officers, employees and consultants of the Resulting Issuer as applicable. It is expected that Tamir Poleg, the current  Chief Executive Officer of Real will become the Chief Executive Officer of the Resulting Issuer upon completion of the Transaction and that Real will appoint a new Chief Financial Officer and Corporate Secretary for the Resulting Issuer.

Mr. Tamir Poleg is a seasoned real estate industry executive possessing over 17 years of management experience. Prior to founding Real in 2014, he served as the Founder and CEO of Optimum RE Investments (2006-2014) and previously in several sales executive positions in public and private technology companies. Mr. Poleg holds a BA in Economics from the College of Management in Israel in addition to completing the Real Estate Entrepreneurship program at Tel Aviv University.

Insiders

In addition to Tamir Poleg, Laurence Rose and the other directors and senior officers of the Resulting Issuer, it is expected that Magma Venture Capital IV LP will be an Insider of the Resulting Issuer (as defined by the policies of the Exchange) by virtue of it holding voting shares carrying more than 10% of the voting rights attached to all outstanding voting shares of the Resulting Issuer. Magma Venture Capital IV LP is a venture capital fund managed by Magma Venture Partners which is a leading Israeli venture capital firm dedicated to investing in Israel's information, communications and technology sector (ICT).

Arm's Length Transaction

The proposed Transaction is an arm's length transaction in accordance with the policies of the TSX-V and is not subject to ADL shareholder approval.

Sponsorship

ADL will apply to the TSX-V for an exemption from applicable sponsorship requirements.

About ADL Ventures Inc.

ADL Ventures Inc. is a capital pool company. The Company's principal business activity is to identify and evaluate opportunities for acquisition of assets or business. The Company was incorporated under the Business Corporations Act (British Columbia) on February 27, 2018, and is headquartered in Toronto, Ontario.

About Real Technology Broker Ltd.

Real is a technology powered real estate brokerage, licensed in over 20 US states and 1100 agents on its team. As one of North America's fastest growing brokerages, Real offers agents a mobile focused tech platform to run their business on, as well as attractive business terms and wealth building opportunities. Real generates substantially all of its revenue from real estate brokerage services as well as a small portion of its revenue from software subscriptions. Real serves as a licensed broker in the markets in which it operates for the purpose of processing residential real estate transactions, facilitated by its real estate agents. Revenue is derived from assisting home buyers and sellers in locating, listing, marketing, leasing and selling residential real estate. 

Cautionary Note

As noted above, completion of the Transaction is subject to receipt of all requisite regulatory, stock exchange, court or governmental approvals, authorizations and consents, approval of the shareholders of ADL and Real (as applicable). Where applicable, the Transaction cannot close until the required approvals have been 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 continuous disclosure document containing full, true and plain disclosure regarding the Transaction, required to be filed with the securities regulatory authorities having jurisdiction over the affairs of the Company, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. The trading in the securities of ADL on the Exchange, should be considered highly speculative. Trading in the common shares of the Company is presently halted and is expected to remain halted pending closing of the Transaction. While halted, the common shares of the Company may only trade upon Exchange approval and the filing of required materials with the Exchange as contemplated by Exchange policy.

Forward-Looking Information

Although the Company believes, in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because the Company can give no assurance that they will prove to be correct. When used in this press release, the words "estimate", "project", "belief", "anticipate", "intend", "expect", "plan", "predict", "may" or "should" and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements and information. The forward-looking statements and information in this press release include information relating to the business plans of ADL and Real, the Transaction (including Exchange approval, court approval, and the closing of the Transaction), the board of directors and management of the Resulting Issuer upon completion of the Transaction and the Brokered Private Placement. Such statements and information reflect the current view of ADL and/or Real, respectively. Risks and uncertainties that may cause actual results to differ materially from those contemplated in those forward-looking statements and information.

By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following risks: (i) there is no assurance that ADL and Real will obtain all requisite approvals for the Transaction, including the approval of their respective shareholders (as applicable), the approval of the Exchange for the Transaction (which may be conditional upon amendments to the terms of the Transaction) or court approval of the Transaction; (ii) there is no assurance the Brokered Private Placement will be completed as contemplated or at all; (iii) following completion of the Transaction, the Resulting Issuer may require additional financing from time to time in order to continue its operations and financing may not be available when needed or on terms and conditions acceptable to the Resulting Issuer; (iv) new laws or regulations could adversely affect the Resulting Issuer's business and results of operations; and (v) the stock markets have experienced volatility that often has been unrelated to the performance of companies. These fluctuations may adversely affect the price of the Resulting Issuer's securities, regardless of its operating performance. There are a number of important factors that could cause ADL's and Real's actual results to differ materially from those indicated or implied by forward-looking statements and information. Such factors include, among others: currency fluctuations; limited business history of ADL; disruptions or changes in the credit or security markets; results of operation activities and development of projects; project cost overruns or unanticipated costs and expenses, and general market and industry conditions. The terms and conditions of the Qualifying Transaction may be based on the Company's due diligence and the receipt of tax, corporate and securities law advice for both the Company and Real. The Company undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of the Company, Real, their securities, or their respective financial or operating results (as applicable).

ADL cautions that the foregoing list of material factors is not exhaustive. When relying on ADL's forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. ADL has assumed that the material factors referred to in the previous paragraph will not cause such forward-looking statements and information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors. The forward-looking information contained in this press release represents the expectations of ADL as of the date of this press release and, accordingly, is subject to change after such date. Readers should not place undue importance on forward-looking information and should not rely upon this information as of any other date. ADL does not undertake to update this information at any particular time except as required in accordance with applicable laws.

This press release is not an offer of the securities for sale in the United States. The securities have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an exemption from registration. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.

Completion of the Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange requirements, 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 Venture Exchange Inc. has in no way passed upon the merits of the Transaction and has neither approved nor disapproved the contents of this press release.

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 press release.

SOURCE ADL Ventures Inc.

ADL Ventures Inc., Laurence Rose - Chairman, President and Chief Executive Officer, 647-920-6383, [email protected]