Apolo IV Acquisition Corp. and Marviken Ontario Inc. enter into Binding Letter of Intent to Complete Qualifying Transaction

TORONTO, Oct. 22, 2024 /CNW/ - Apolo IV Acquisition Corp. (TSXV: AIV.P) ("Apolo") and Marviken Ontario Inc. ("Marviken") in cooperation with BotOptions (UK) PLC, a financial institution specialising in the issuing of debt instruments, are pleased to announce that they have entered into a binding letter of intent dated October 22, 2024, which outlines the terms and conditions pursuant to which Apolo and Marviken will complete a transaction that will result in a reverse take-over of Apolo by Marviken (the "Proposed Transaction"). The Proposed Transaction will be an arm's length transaction, and, if completed, will constitute Apolo's "Qualifying Transaction" (as such term is defined in Policy 2.4 of the TSX Venture Exchange Corporate Finance Manual). 

Marviken

Marviken is the owner of a 600 acre site (the "Energy Cluster") that is strategically located south of Stockholm, Sweden. The Energy Cluster benefits from a long history of power production, existing operational battery facilities, and plans for significant expansion, including a data center and a 70 MW / 70 MWh battery energy storage system ("BESS") (collectively, the "Project") connecting via an on-site substation. Marviken is aiming to build services in the transformation of the Swedish energy landscape, driven by a significant need to address grid reliability.

Proposed Transaction Summary

The Proposed Transaction is expected to be structured such that a wholly-owned subsidiary of Apolo will amalgamate with Marviken (the "Combination") to form a newly amalgamated company ("Amalco"). Pursuant to the Combination, holders of common shares in the capital of Marviken (each a "Marviken Share") will receive one common share in the capital of Apolo (each, an "Apolo Share"), in each case on a post-Consolidation (as defined below) basis. In addition, pursuant to the Combination, each Marviken stock option and certain Marviken warrants will be exchanged for an Apolo stock option and/or Apolo warrant, as applicable, on substantially the same terms and conditions, except that such securities will thereafter be exercisable to receive common shares of the entity resulting from the Proposed Transaction (the "Resulting Issuer").

In order to align the value of the Apolo Shares with the value per Marviken Share at which the Proposed Transaction and the Concurrent Financing (as defined below) will be completed, it is anticipated that Apolo will consolidate the Apolo Shares on the basis of one post-consolidation Apolo Share for every 4.1667 existing Apolo Shares as of the date of this news release (the "Consolidation").

Upon completion of the Proposed Transaction, the Resulting Issuer will carry on the business of Marviken. Pursuant to the terms of the Proposed Transaction, Apolo intends to change its name to Marviken Energy Inc. or such other name as is mutually agreed between Apolo and Marviken and acceptable to applicable regulators (the "Name Change"). Further, it is proposed that the officers and directors of Marviken will replace the existing officers and directors of Apolo. Biographical information regarding these individuals is provided below under the heading "Officers and Directors". 

The Proposed Transaction is subject to the parties successfully entering into a definitive agreement in respect of the Proposed Transaction on or before December 31, 2024, or such other date as Marviken and Apolo may mutually agree. Completion of the Proposed Transaction is also subject to a number of other conditions, including obtaining all necessary board, shareholder and regulatory approvals, including TSX Venture Exchange ("TSXV") approval.

Concurrent Financing

In connection with the Proposed Transaction, Marviken intends to complete a best efforts private placement of subscription receipts (the "Subscription Receipts") with a syndicate of agents led by Haywood Securities Inc. (collectively, the "Agents"), at a price of $0.50 per Subscription Receipt (the "Issue Price"), for aggregate gross proceeds of up to $5 million (the "Concurrent Financing"). Under the terms of the Concurrent Financing, the Agent will be granted an option (the "Over-Allotment Option") to place up to an additional 15% of the number of Subscription Receipts issuable under the Concurrent Financing, at the Issue Price. The Over-Allotment Option will be exercisable (in whole or in part) by the Agents upon notice to Marviken at any time up to 48 hours prior to the close of the Concurrent Financing.

Each Subscription Receipt shall be deemed to be exchanged, without payment of any additional consideration and subject to adjustment, upon satisfaction of certain escrow release conditions (the "Escrow Release Conditions"), for one unit of Marviken (a "Unit"). Each Unit shall be comprised of one common share in the capital of Marviken and one common share purchase warrant (a "Warrant") of Marviken. Each Warrant shall be exercisable to acquire one common share of Marviken (a "Warrant Share") at a price per Warrant Share of $0.75 for a period of 36 months from the date on which a final bulletin is issued by the TSXV announcing TSXV approval of the Proposed Transaction (the "Final Bulletin"). The securities issued upon the automatic exercise of the Subscription Receipts shall be exchanged pursuant to the Combination for securities of the Resulting Issuer on a one-for-one basis.

In connection with the Concurrent Financing, the Agents will be paid a cash commission equal to 7%of the gross proceeds raised under the Concurrent Financing, 50% of which shall be paid on the closing of the Concurrent Financing and 50% upon satisfaction of the Escrow Release Conditions (which shall be reduced to 5% in respect of President's List subscriptions). The Agents shall also be issued compensation options (the "Compensation Options") equal to 7% of the aggregate number of Subscription Receipts sold under the Concurrent Financing (which shall be reduced to 5% in respect of President's List subscriptions). Each Compensation Option shall be exercisable for one Marviken common share at an exercise price of $0.50 for a term of 36 months from the date of the Final Bulletin. The Compensation Options shall be exchanged for compensation options of the Resulting Issuer on a one-for-one basis.

Shareholder Meetings

In connection with the Proposed Transaction, Apolo will convene a meeting of its shareholders for the purpose of approving, among other matters, the Consolidation, the Name Change and the election of the directors to replace the current directors of Apolo immediately following the completion of the Proposed Transaction as well as approval from the requisite Apolo shareholders to remove the consequences of failing to complete a qualifying transaction within 24 months of listing as set forth in section 15.2(b)(i) of Policy 2.2 of the TSXV Corporate Finance Manual. Marviken will convene a meeting of its shareholders for the purpose of approving, or obtain unanimous shareholder written approval in respect of the Combination and ancillary matters. 

Capitalization

As at the date of this news release and prior to the Consolidation, Apolo has 20,000,000 common shares and 2,750,000 stock options, each exercisable to acquire one Apolo Share (on a pre-Consolidation basis), issued and outstanding. As at the date hereof, Marviken has 50,000,000 common shares issued or issuable under existing agreements.

On completion of the Proposed Transaction, assuming a $5 million Concurrent Financing by Marviken, and assuming completion of the Consolidation, it is anticipated that there will be an aggregate of approximately 64,800,000 Apolo Shares outstanding, of which 7.4% shall be held by the former Apolo shareholders, and the remainder by the Marviken shareholders, including subscribers under the Concurrent Financing. The foregoing excludes any Apolo shares issuable under any convertible instruments (including the Warrants and the Compensation Options).

A filing statement of Apolo will be prepared and filed in accordance with the policies of the TSXV. 

Officers and Directors

Subject to applicable shareholder and TSXV approval, it is anticipated that the officers and directors of the Resulting Issuer will be: 

Niclas Adler - Chief Executive Officer and Director

Dr. Adler is the CEO and Director of Marviken ONE AB, specializing in technology. With 30 years of experience, he's been a serial entrepreneur, investor, and academic, focusing on AI, Digitalization, Renewable Energy, and High-performance Computing. Dr. Adler has been involved in over 40 technology companies across various countries, many listed on Nasdaq and acquired by major firms. He's also co-founded and served on boards of Venture Capital and Private Equity funds in Europe and Asia.

Timothy Holmes - Director

Timothy is a financial executive with over 30 years of industry experience serving as CFO for two PE/family office backed companies. He managed portfolios at a boutique asset management firm and held senior roles at firms including Nuveen Asset Management and John A Levin & Co. He also worked in investment banking at Robertson Stephens and served as an Independent Director at Wells Fargo Bank's Alternative Asset Funds. Tim was a Lieutenant Commander in the US Navy and holds a B. Sci. in Chemistry from UC Davis.

Vassilis Popotas - Director

Vassilis specializes in Risk Management. For fourteen years, he focused on forecasting price moves and managing funds. He has developed custom models emphasizing a scientific approach, including algorithmic pattern recognition. He incorporated CDSs for portfolio protection and speculation. He advised on shipping investment banking and co-founded the Greek and UK Market Analyst Associations. Vassilis holds a Chartered Market Technician ("CMT") qualification and is completing a PhD on "Trading Late-stage Capitalism in Deflationary Cycles". He co-founded BotOptions (UK) PLC in 2015, aiming to introduce capital protection in emerging markets.

Pernilla Adler – Chief Financial Officer and Director

Pernilla Adler brings 30 years of combined experience as an investor and CFO in technology firms. She's held roles as a co-founder, investor, executive, and board member in over 20 technology companies, with several listed on the NASDAQ and acquired by top firms. Pernilla has successfully led investments in AI, algorithm-based businesses, and energy companies. Notably, she was an early investor in KRY, a European digital health leader that raised U.S.$586.6 million, valuing at U.S. $2 billion in April 2021.

Vince Gasparro - Director

Vince Gasparro is an experienced finance leader with over 20 years of private and public sector experience. With a successful track record of originating, structuring, financing (as well as advising) bankable renewable infrastructure transactions. with clients ranging from First Nations, public sector institutions as well as medium-large private corporations. Most recently, Vince was the Managing Director & Head of Sustainable Finance at Roynat Capital – Scotiabank.  Previously, he was Managing Director, Corporate Development & Clean Energy Finance, at Vancity Community Investment Bank (VCIB), where he successfully built a leading sustainable finance business. He was also previously Principal Secretary to Toronto Mayor John Tory, where he led the implementation of multiple public policy objectives. He has also served former Canadian Prime Minister Paul Martin as Special Assistant, Ontario.

Vince currently serves on the board of directors of the Canada Infrastructure Bank, Postmedia (TSX:PNC-A) Canada's largest legacy media company as well as the World Wildlife Fund – Canada. In addition, from 2015-2018 Vince served on the board of directors of Toronto Community Housing North America's 2nd largest social housing provider.

Vince has a BA (Honours) from York University, an MSc from the London School of Economics, and an Executive MBA from Villanova University.

Sponsorship

The Proposed Transaction is subject to the sponsorship requirements of the TSXV, unless a waiver or exemption from this requirement can be obtained in accordance with the policies of the TSXV. In connection with the Concurrent Financing, Apolo intends to apply for a waiver of the sponsorship requirement; however, there is no assurance that a waiver from this requirement can or will be obtained. 

Trading in Apolo Shares

Trading in the Apolo Shares will remain halted pending the review of the Proposed Transaction by the TSXV and satisfaction of the conditions of the TSXV for resumption of trading. It is likely that trading in the Apolo Shares will not resume prior to the closing of the Proposed Transaction. 

This news release does not constitute an offer of securities for sale in the United States. The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and such securities may not be offered or sold within the United States absent U.S. registration or an applicable exemption from U.S. registration requirements.

A subsequent news release with respect to the closing of the Concurrent Financing and including a summary of certain significant financial information with respect to Marviken will follow in due course.

Marviken is represented by Mason Law. Cassels Brock & Blackwell LLP acts as legal counsel to Apolo. Bennett Jones LLP acts as legal counsel to Haywood Securities Inc.

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

Cautionary Note Regarding Forward-Looking Information

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 Apolo and Marviken 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 Proposed Transaction will be consummated, including whether conditions to the consummation of the Proposed Transaction will be satisfied, or the timing for completing the Proposed Transaction; (ii) the timing for closing and the pricing and size of the Concurrent Financing; and (iii) 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 Apolo and Marviken'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 Apolo and Marviken believe 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 combined company. 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 Proposed Transaction; the ability to obtain requisite regulatory and shareholder approvals and the satisfaction of other conditions to the consummation of the Proposed Transaction on the proposed terms and schedule; the potential impact of the announcement or consummation of the Proposed 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; and the diversion of management time on the Proposed Transaction. This forward-looking information may be affected by risks and uncertainties in the business of Apolo and Marviken 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 Apolo and Marviken 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. Apolo and Marviken do not intend, and do not assume any obligation, to update this forward-looking information except as otherwise required by applicable law.

Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to TSXV acceptance and, if applicable pursuant to TSXV requirements, majority of the minority shareholder approval. Where applicable, the Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.

SOURCE Apolo IV Acquisition Corp.

For further information, please contact: Timothy Holmes, Director, E-mail: [email protected]; Apolo IV Acquisition Corp., Ryan Roebuck, Director, E-mail: [email protected]