HAW Capital 2 Corp. Announces Proposed Qualifying Transaction

·6 min read

Calgary, Alberta--(Newsfile Corp. - December 7, 2021) - HAW Capital 2 Corp. (TSXV: HAW.P) ("HAW2" or the "Company"), a capital pool company as defined under Policy 2.4 - Capital Pool Companies of the TSX Venture Exchange (the "Exchange") is pleased to announce details related to an executed letter of intent, dated December 2, 2021 (the "LOI") with Songistry Inc. ("Songistry"), a private company incorporated under the laws of the Province of Alberta, with respect to a proposed combination of both companies (the "Proposed Transaction"). The Proposed Transaction is expected to be effected by way of a share exchange, a triangular merger or similar transaction pursuant to the terms of a definitive agreement to be entered into by HAW2 and Songistry (the "Definitive Agreement"). The Proposed Transaction is expected to constitute a reverse take-over of HAW2 upon completion, and upon HAW2 shareholder approval, the Company expects to be renamed "Songistry Inc." (the "Resulting Issuer"). It is intended that the Proposed Transaction, when completed, will constitute the Company's "Qualifying Transaction" in accordance with Policy 2.4 of the TSX Venture Exchange Corporate Finance Manual. The Proposed Transaction is subject to compliance with all necessary regulatory and other approvals and certain other terms and conditions, including those set out in the Definitive Agreement.

Songistry has developed MDIIO (pronounced mid-EE-Oh), a music asset/copyright management and licensing engine that leverages the latest in artificial intelligence ("AI") for songwriters, artists, music publishers, record labels, music supervisors, filmmakers and film and TV production companies. Songistry believes that MDIIO is the only music service that combines the needs of creators and creatives in a completely re-imagined and AI supported work-flow.

In connection with the Proposed Transaction, it is anticipated that at least 33,151,282 HAW2 common shares will be issued to Songistry securityholders in exchange for their Songistry securities (the "Songistry Securities"); with an approximate deemed aggregate consideration of $22,000,000 (or $0.15/ HAW2 common share). In addition, the Company anticipates that immediately prior to the closing of the Qualifying Transaction, HAW2, subject to shareholder approval, will cause its share capital to be consolidated on the basis of 4.42:1 so that HAW2's share capital immediately prior to the closing of the Qualifying Transaction shall consist of 3,167,421 HAW2 common shares.

It is estimated that following closing of the Proposed Transaction and the Concurrent Financing (as described below), HAW2 shareholders will hold approximately 7% of the Resulting Issuer's common shares and former Songistry securityholders will hold approximately 93% of such common shares.

Closing of the Proposed Transaction is subject to the completion by Songistry of a concurrent equity financing of a minimum of $4,000,000 (the "Minimum Proceeds") and a maximum of $5,500,000 prior to the closing of the Proposed Transaction at a price of $0.66 per Songistry share (the "Concurrent Financing"). The Concurrent Financing may be completed on a brokered or non-brokered basis or a combination thereof. As of the date of this press release, no broker has been engaged by Songistry in connection with the Concurrent Financing. Concurrent with the completion of the Proposed Transaction, it is expected that one of the directors and officers of HAW2 will be retained as a director of the Resulting Issuer, with the remainder of the directors and officers to be replaced by Songistry nominees.

A more comprehensive news release will be issued by the Company disclosing details of the Proposed Transaction in accordance with the policies of the Exchange, including financial information respecting Songistry, the names and backgrounds of all persons who will constitute principals or insiders of Songistry, and information respecting sponsorship. The Company anticipates such news release will be issued once the Definitive Agreement has been finalized and certain conditions have been met, including: i) approval of the Proposed Transaction by the board of directors of the Company and ii) satisfactory completion of due diligence. Shareholder approval is not expected to be required with respect to the Proposed Transaction under the rules of the Exchange. However, shareholder approval will be required to change the name of the Company and to complete the Share Consolidation. In the event a Definitive Agreement is not reached, the Company will notify its shareholders by way of a news release. Trading in the shares of the Company has been halted and is not expected to resume until the Proposed Transaction is completed or until the Exchange receives the requisite documentation to resume trading. If the Proposed Transaction is completed, the Company expects that the Resulting Issuer will be listed on the Exchange as a technology issuer.

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, 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 Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

For further information, please contact:

Scott McGregor
Chief Executive Officer
scott@mcgregorcorp.com

403-669-6065

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 release.

This news release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, the structure of the Proposed Transaction, approval of the Exchange of the Proposed Transaction, completion of the Proposed Transaction, the share consolidation, the timing and amount of the Concurrent Financing, the name change and regulatory and shareholder approvals. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "is expected", "expects" or "does not expect", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", "believes", or variations of such words and phrases; or terms that state that certain actions, events, or results "may", "could", "would", "might", or "will be taken", "could occur", or "be achieved". Forward-looking information is based on the opinions and estimates of management at the date the information is made, and is based on a number of assumptions and is subject to known and unknown risks, uncertainties and other factors, including but not limited to obtaining the necessary approvals of the Exchange and the shareholders of the Company, the Company's ability to complete the Proposed Transaction, completion of the Concurrent Financing, and other risks and uncertainties. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated, or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward- looking information, except in accordance with applicable securities laws.

Not for distribution to U.S. newswire services or for release, publication, distribution or dissemination directly, or indirectly, in whole or in part, in the United States

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/106990

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