CARBONTECH CAPITAL CORP. ANNOUNCES PROPOSED QUALIFYING TRANSACTION WITH HAPPI VENTURES INC. AND TERMINATION OF ITS PREVIOUSLY ANNOUNCED TRANSACTION

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TORONTO, March 6, 2023 /CNW/ - CarbonTech Capital Cop. (TSXV: CT.P) ("CT"), a capital pool company listed on the TSX Venture Exchange (the "Exchange"), is pleased to announce that it has entered into a purchase agreement dated March 6, 2023 (the "Agreement") with Happi Ventures Inc. ("Happi Builds") and its shareholders, pursuant to which CT will acquire all of the issued and outstanding securities of Happi Builds (the "Transaction"). Under the terms of the Agreement, CT will issue to the shareholders of Happi Builds at closing of the Transaction a total of 13,933,332 common shares in the capital of CT at a deemed price of $0.15 per share.

The Transaction is subject to the approval of the Exchange and is intended to constitute CT's qualifying transaction for the purposes of the Corporate Finance Manual of the Exchange (the "Exchange Polices"). Upon completion of the Transaction, CT, as the resulting issuer (the "Resulting Issuer"), will continue to list its common shares (the "Resulting Issuer Shares") on the Exchange as a Tier 2 issuer and its business will be that of Happi Builds. The proposed Transaction does not constitute a Non-Arm's Length Transaction under the Exchange Policies.

Happi Builds is a private Ontario company that was formed on February 15, 2019 to explore various investment opportunities and has focused on the quickly expanding backyard housing sector including the marketing and distribution of accessory dwelling units (ADUs).  

The housing affordability crisis is triggering public stimulus at all levels of government to encourage the rapid increase of our housing supply. This includes major zoning expansions to enable, encourage and incentivize construction of new dwellings within the existing private property lots. In California, where new zoning was introduced in 2016, 60,000 permits for backyard homes have already been issued. One-third of those occurred in 2021 alone. A similar bylaw was passed in Toronto in 2022. Happi Builds is creating a solution to seek to solve both the housing affordability and climate crisis as management believes that the environmental benefits of heightened density make ADUs the optimal choice for property owners, tenants and government.

Happi Builds is the exclusive Ontario distributor of R-Hauz Solutions Inc.'s garden suite and laneway houses pursuant to the terms of a distribution and marketing agreement between the parties. The agreement has an initial term of five years which may be extended for another five year periods subject to Happi Builds satisfying certain sales targets.

The closing of the Transaction is subject to a number of conditions, including: (i) CT and Happi Builds successfully completing a financing; (ii) the Resulting Issuer satisfying the Exchange's initial listing requirements; (iii) Exchange approval; (iv) employment of Matthew Soloway as Chief Executive Officer on closing of the Transaction; and (v) no material adverse change occurring in CT or Happi Builds. Pursuant to the terms of the Agreement, CT will seek to advance an unsecured loan of $25,000 and a secured loan in the amount of $225,000 to Happi Builds, subject to the requirements and conditions of the Exchange Policies, including but not limited to, Exchange acceptance.

Upon completion of the Transaction, Happi Builds will become a wholly-owned subsidiary of CT and the Resulting Issuer will continue with the business of Happi Builds. Former shareholders of Happi Builds will hold approximately 44.6% and the existing shareholders of CT will hold approximately 55.4% of the issued and outstanding shares of the Resulting Issuer (before taking into account the CT financing or exercise of any options of CT).

Prior to the closing, CT is to undertake a private placement. Additional information with respect to the private placement will be disclosed in a subsequent news release.

Sponsorship of the Transaction is required by the Exchange Policies unless an exemption is obtained. CT intends to seek an exemption from the sponsorship requirements in accordance with the Exchange Policies.

Subject to the Exchange acceptance, Matthew Soloway, the current president of Happi Bulds, will become the Chief Executive Officer of the Resulting Issuer and the following individuals are currently expected to comprise the Resulting Issuer's directors, officers and insiders immediately following closing of the Transaction. In addition, former shareholders of Happi Builds may appoint an additional director to the board of directors of the Resulting Issuer at any time following closing and prior to the 12-month anniversary of closing of the Transaction.

Matthew Soloway, Director and Chief Executive Officer

Mr. Soloway founded LUXE Travel Company and grew the business to become North America's premiere luxury group travel consultancy with sales in the tens of millions before selling the business in 2018. Mr. Soloway consulted on the opening of 30 + luxury hotels in the Caribbean and Mexico and developed and managed their consumer vacation brands. After selling LUXE, Matt's passion for identifying new business opportunities led to him co-founding Tamakwa Experiences, a lifestyle experiences company. Mr. Soloway has continued to grow and develop new brands in the luxury space, and has a passion for new business opportunities that identify voids in the market, and consults with start-ups on their business development.

Previously, Mr. Soloway worked at the United Nations in The Hague on the Milosevic trial before completing law school at the University of Victoria and articling at a leading Toronto law firm.

David Goodman – Chair

Mr. Goodman left an early career as a litigator in 1994 to become a Partner, Vice President and Portfolio Manager at the investment management firm behind Dynamic Funds.  He became President and Chief Executive Officer of Dynamic Funds in 2001 and of DundeeWealth, Dynamic's public company parent, in 2007.  Under Mr. Goodman's leadership, the firm became one of Canada's best performing and fastest growing investment managers, was recognized as Fund Company of the Year seven times at the Canadian Investment Awards while growing assets under management from $5 billion to approximately $50 billion, until its ultimate sale in 2011 to a Canadian bank. 

In the past Mr. Goodman was a member of the boards of DundeeWealth, Repadre Capital Corporation, Dundee Corporation, SickKids Foundation and a trustee of the Dundee REIT.  Mr. Goodman was previously the head of Global Asset Management for a major Canaidan bank and CEO of Dundee Corporation.  In addition to his business interests, Mr. Goodman is currently a stand-up comedian affiliated with Yuk Yuk's Comedy Clubs.  Mr. Goodman's passion for performing stand-up comedy extends into his philanthropic activities.  Mr. Goodman is the founder of Humour Me which has to date raised over $19 million in support of some very deserving causes.

Jonathan Westeinde – Director

Mr. Westeinde is founder and CEO of the Windmill Development Group ("Windmill"), a firm recognized as one of Canada's most innovative eco-social real estate firms. Windmill and its wholly owned advisory subsidiary, Urban Equation, have been lead developer or strategic advisor on Canada's most recognized and highest performing large scale sustainable real estate developments, including lead developer responsible for the initiation of the first LEED Platinum community in Canada (Docksidegreen, Victoria) and the first One Planet Living Community in Canada (Zibi, Ottawa). Under Mr. Westeinde's leadership the team has been directly engaged in over $5B in high performing socially responsible real estate outcomes. Mr. Westeinde is specifically interested in creating alternative financing vehicles to create 'planet fit' real estate assets and is a recognized leader in Canada for finding innovative solutions for nonconventional lifecycle financing including innovative partnerships to create zero carbon district energy systems and energy services contracts to introduce geothermal and green loans. Mr. Westeinde's most recent focus has been originating and co-managing The One Planet Living Real Estate Fund, a new real estate impact fund which is driving a $1B pipeline of new One Planet Living communities in Canada. Mr. Westeinde sits on a number of profit and non-profit boards and was recognized as one of Canada's top Clean 16 in 2021 for contribution to clean capitalism in Canada and received the National Green Building Leader award from the CaGBC in 2018. Mr. Westeinde holds an MBA from Trinity College, Ireland and a BA Economics from the University of Western Ontario.

Andrew Shapack – Director and Chief Financial Officer

Mr. Shapack is the Founder of Mohawk Asset Management, a Toronto-based real estate private equity and asset management firm specialising in healthcare properties. He has a lengthy real estate track record including 37 medical office acquisitions, multiple REIT formations and exits and is a veteran of Mohawk Medical Properties REIT, GT Canada Medical Properties REIT and the New York City office of PricewaterhouseCoopers and law firm Paul Hastings. He founded the first medical office REIT in Canada, GT Canada Medical Properties REIT, where he served as the Chief Executive Officer. Upon the successful sale of this publicly traded REIT, Mr. Shapack was the co-founder of a private REIT called Mohawk Medical Properties REIT. Mohawk purchased medical office buildings in Ontario, Alberta, New York and Florida. This private REIT was sold to a TSX-listed global healthcare real estate company. From 2014 – 2017, Mr. Shapack was a member of the Board of Trustees for OneREIT, a real estate investment trust listed on the TSX, where he served as Chairman of the Audit Committee, Chairman of the Governance Committee and member of the Investment Committee. OneREIT was successfully sold to another REIT listed on the TSX and Mr. Shapack served on the Special Committee. He currently is a Trustee, and Chairman of the Audit Committee, with Nova Net Lease REIT. He is widely recognized as an expert and pioneer in the field of North American medical office buildings and has enjoyed invitations to share his perspective on such programs as BNN-Bloomberg "Market Call" and the Queen's Real Estate Roundtable. Mr. Shapack is a lawyer admitted to the New York and Connecticut Bar and practised with Paul Hastings LLP in New York City in their Real Estate Finance Department. He participated in large and complex transactions involving REIT and UPREIT structures, joint venture/preferred equity positions, opportunistic acquisitions of real property, entity level investments, as well as various high-yield debt instruments. Prior to legal practice, also in New York City, he was an associate with PricewaterhouseCoopers in their Real Estate Securitization and Capital Markets Group. He received a BA in Economics from the University of Wisconsin and law degree from the Catholic University of America in Washington, D.C.

Seldon (Jamie) James – Director

Mr. James is a Managing Partner of Greensoil PropTech Ventures. For over a decade prior to joining Greensoil, Mr. James was the lead sustainability advisor to Tridel, Toronto's leading condominium developer, where he contributed to the company's transition to a green building leader with millions of square feet of LEED certified projects. For six years, he was a Partner in the Windmill Development Group, when they successfully developed LEED-Platinum certified mixed-used buildings and communities in Calgary, Ottawa, and at Dockside Green in Victoria. Mr. James' first foray into cleantech investing in the real estate space was as the founder of 350 Capital, a micro-VC fund that invested in green building technologies such as Carbon xPrize winner Carbon Cure (greener concrete), Enerworks (solar thermal), dPoint Technologies (energy recovery technologies for HVAC), and Terracycle (upcycled waste products). In 2011, working with the cleantech practice at the MaRS Discovery District and Tridel, he founded Tower Labs, a technology accelerator that manages in-situ pilot and demonstration projects of green building technologies in large buildings in Toronto. Installed technology examples include electrochromic windows, water and air heat recovery systems, energy storage, residential net-zero energy systems, VRF systems, concrete carbonization, thermal break cladding systems, and micro-grid systems, among others. Mr. James serves on the Board of Directors of a number of cleantech companies with a range of energy efficiency technologies addressing the real estate industry, including HVAC and lighting controls technologies, home energy storage systems, and energy and sustainability benchmarking software services. He was also an early director of the Canada Green Building Council (2008-2011).

Cleo Kirkland – Director  

Ms. Kirkland is the Managing Partner of Toronto and Montreal offices of Korn Ferry. She has extensive experience in Insurance and is a member of the Legal, Risk and Compliance Centers of Expertise. Ms. Kirkland has led hundreds of general counsel, chief compliance officer, corporate secretary, chief risk officer and other senior in-house legal, compliance, risk and executive searches. Much of Ms. Kirkland's time is spent advising leading Canadian and International law firms on succession planning, expansion and targeted lateral partner recruitment. She also has deep experience identifying functional leaders in operations, marketing, finance, information technology and professional development for law and other professional services firms. Ms. Kirkland also brings diverse experience in Insurance working with a broad range of clients, including diversified financial services companies, multiline and multinational carriers, small monoline writers and mutuals in Property Casualty (Personal Commercial, Specialty, E&S), Life, and Group insurance, Brokerage, Retirement and Annuities. Her recruiting experience spans an array of functional areas and titles, e.g. CEO, President, CFO, COO, CMO, CRO, and GM, as well as leaders in Finance, Underwriting, Product, Actuarial, Sales, Marketing, Distribution, Claims, Operations, etc. Ms. Kirkland is actively involved in broader firm-building activities, including serving on the North American Promotions Committee, acting as a faculty for new partner training and leading development sessions for consultants across lines of business. She also sits on the Participant Approval Committee for the Catalyst Women On Board Program. Ms. Kirkland is a lawyer and before starting her career in search, she practiced commercial litigation. Ms. Kirkland holds a bachelor of arts in philosophy and music (with First Class Honours) from Queen's University and both civil and common law degrees (with Distinction) from McGill University. She was admitted to the Ontario Bar in 2004.

Additional Information

Trading in the CT Shares will remain halted. It is uncertain whether the shares of CT will resume trading until the Transaction is completed and approved by the Exchange.

Further updates in respect of the Transaction and the proposed financing will be provided in subsequent press releases and the Filing Statement to be filed by CT in connection with the Transaction, which will be available in due course under CT's SEDAR profile.

Termination of Waverly Transaction

CT also announces that it has terminated the purchase and sale agreement dated November 22, 2022 in respect of the acquisition of the property located at 33 Waverly Road, Toronto, Ontario.

The Exchange has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release.

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

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities 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 or an exemption from such registration is available

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 proposal to complete the Transaction and associated transactions, including statements regarding the terms and conditions of the Transaction, the Agreement, the loans and the concurrent financings. 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; the risks that the parties will not proceed with the Transaction, the concurrent financings and associated transactions; the risk that the ultimate terms of the Transaction, the concurrent financings and associated transactions will differ from those that currently are contemplated; the risk that the Transaction, the concurrent financings and associated transactions will not be successfully completed for any reason (including the failure to obtain the required regulatory approvals); and the results of continued development, marketing and sales. 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. CT disclaims 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.

SOURCE CarbonTech Capital Corp.

Andrew Shapack, CFO and Director, CarbonTech Capital Corp., [email protected]; Jonathan Westeinde, Director, Urban Equation Corp., [email protected]