U.S. Markets closed

Platform 9 Capital and CGI Merchant Group Announce Letter of Intent for Qualifying Transaction

Newsfile Corp.

Toronto, Ontario--(Newsfile Corp. - December 17, 2019) - Platform 9 Capital Corp. (TSXV: PN.P) (the "Company" or "Platform") is pleased to announce the entering into of a Letter of Intent (the "LOI") dated December 13, 2019, which sets forth the general terms and conditions pursuant to which the Company and CGI Merchant Group, LLC ("CGI") have agreed to complete a transaction (the "Transaction") that will result in reorganization of Platform into a real estate investment trust (the "REIT") that CGI Merchant Group, LLC will form under the laws of Ontario. The REIT will acquire equity interests in the Hospitality Fund (defined below). The proposed Transaction will be effected by way of a plan of arrangement under the Business Corporations Act (Ontario) (the "Arrangement") which results in the units of the REIT trading on the TSX Venture Exchange (the "TSXV"). It is intended that the Transaction will constitute the "Qualifying Transaction" of Platform as such term is defined in the policies of the TSXV. The Transaction is not a "Non-Arm's Length Qualifying Transaction" within the meaning of the policies of the TSXV.

CGI Merchant Group, LLC and the REIT

CGI Merchant Group, LLC is an institutional investment manager that is establishing an institutional fund platform (the "Hospitality Fund"), comprised of GP and LP capital, a legal fund structure, asset acquisition resources and hotel asset management expertise for a new hospitality concept: The Gabriel - A Conscious Hotel (the "Gabriel"). The REIT will purchase equity interests of the Hospitality Fund.

The Gabriel

The seed institutionally held asset to be held in the portfolio of the Hospitality Fund will be The Gabriel. The Gabriel is operationally and financially committed to the core social values of its targeted travelers-the socially conscious traveler. The Gabriel is a Hilton hotel under the Curio Collection and managed by Evolution Hospitality, a subsidiary of Aimbridge Hospitality. The property includes five (5) revenue generating components: Hotel (The Gabriel), Restaurant (Cvltvra Restaurant), Spa (Dermamex), Wallscape (two billboards operated by Outfront Media), and Parking. The iconic building is a Trophy "Class-A" high-rise in Miami's skyline and is located in the heart of Downtown Miami, just steps away from Miami's most well-known visited sports arena, art & culture and shopping venues in South Florida. The Gabriel is located in the arts and culture epicenter of Miami, which, in the aggregate, is one of the areas with the most foot traffic in the city. The hotel is surrounded by the city's biggest arena, the city's opera and ballet venue, the two biggest science and arts museums, and the biggest marketplace, to name a few. The majority of these venues and attractions were finished or renovated in the past five years. Currently, there are 30 under-construction developments including a USD$4 billion World-Center project, an entertainment and observation sky rise set to be the tallest building in the state, as well as a USD$1 billion signature bridge. The capital influx this particular area has seen and is expected to receive surpasses that of any other area in Miami. The Gabriel has been awarded the Deal Of The Year award from the National Association of Black Hotel Owners, Operators and Developers ("NABHOOD") sponsored by Hilton at their Annual Conference on July 24, 2019 in downtown Miami. This is an event of national reach, and the award was presented by the chairman of NABHOOD and Hilton's President & CEO.

Hospitality Fund

The Hospitality Fund's core strategy is to deploy the capital within 3 years to roll out twenty (20) hotels under the Curio Collection flag by Hilton. The investment objectives of Hospitality Fund are aligned to the nature of the business plan, the partnership with Hilton, and the general market opportunity given the cycle in the economy and its perceived shifts.

Hospitality Fund's investment objectives are: the highest possible risk adjusted rate of return as measured by cash-on-cash returns net of all fees, expenses, and carried interests, a reasonable diversification among investments within the total portfolio, a limited life structure that aligns fund management and general partner and limited partner interests and goals, a distribution policy that returns cash to limited partners as rapidly as possible given the nature of the underlying portfolio, and an allocation policy that minimizes tax consequences.

Terms of the Transaction

Pursuant to the terms of the Transaction, each equity share ("Share") of Platform shall be exchanged for a unit of the REIT ("Units") on the basis of an exchange ratio (the "Exchange Ratio") determined having regard for the proportionate valuations of Platform and the REIT on a post-Transaction basis, and each outstanding agent warrant of Platform shall be exchanged for a comparable convertible security of the REIT, having regard for the Exchange Ratio. The parties have agreed to a valuation of Platform of $1,541,730CDN and an approximate valuation of the REIT of $50,000,000USD (the "REIT Valuation"). The REIT Valuation is subject to change based on the final valuation of the Gabriel and the percentage interest of the Hospitality Fund acquired by the REIT.

Upon completion of the Transaction, the REIT is expected to meet all of the minimum listing requirements of the TSXV. Completion of the Transaction is subject to a number of conditions including, but not limited to: (i) completion of mutually satisfactory due diligence; (ii) execution of a definitive agreement with respect to the Transaction; (iii) requisite board and shareholder approvals; (iv) completion of the Concurrent Financing (as defined below); (iv) acquisition of the Gabriel by the Hospitality Fund; and (vi) receipt of all requisite regulatory approvals relating to the Transaction, including, without limitation, the TSXV.

Platform shareholders will be asked to approve the Transaction at a special meeting of shareholders (the "Meeting"). Further details of the Transaction will be included in a management information circular of the Company, which will be mailed to shareholders in connection with the Meeting and filed on SEDAR at www.sedar.com.

The Acquisition

A summary of significant financial information respecting the Gabriel will be announced in a subsequent press release regarding the Transaction to be issued in accordance with the policies of the TSXV.

Management and Insiders of the Resulting Issuer

Information with respect to the board of trustees, senior officers, and other insiders of the REIT will be announced in a subsequent press release regarding the Transaction to be issued in accordance with the policies of the TSXV.

Concurrent Financing

The REIT will complete a concurrent brokered private placement financing for such amount of gross proceeds as determined by the REIT and the agents (the "Concurrent Financing"), at a price per security and on terms and conditions to be determined by negotiation between the REIT and the agents in the context of the market. Pursuant to the Concurrent Financing, the REIT may pay customary broker and finder's fees and expenses. The net proceeds from the Concurrent Financing will be used to purchase equity interests in the Hospitality Fund and for working capital purposes of the REIT. Further information with respect to the terms of the Concurrent Financing will be announced in a subsequent press release once available.

Sponsorship

The Transaction is subject to the sponsorship requirements of the TSXV, unless an exemption from the sponsorship requirement is available or a waiver is granted. The Company intends to apply for an exemption to the sponsorship requirement. There is no assurance that an exemption from this requirement will be obtained.

Trading of the Shares

Trading in the Company's Shares has been halted as a result of the announcement of the Transaction. The Company expects that trading will remain halted pending closing of the Transaction, subject to the earlier resumption upon TSXV acceptance of the Transaction and the filing of required materials in accordance with TSXV policies.

About Platform 9 Capital Corp.

The Company is incorporated under the Business Corporations Act (Ontario) and is a Capital Pool Company listed on the TSXV. The Company has no commercial operations and has no assets other than cash. For further information please see the final prospectus of the Company dated May 17, 2018, filed on SEDAR at www.sedar.com.

For further information please contact:

John Travaglini
Chief Executive Officer
(416) 861-1100

Cautionary Notes

All information provided in this press release relating to CGI and the REIT has been provided by management of CGI and has not been independently verified by management of the Company.

Completion of the 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 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. 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 press release contains statements that constitute "forward-looking information" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that discusses predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. Forward-looking statements contained in this press release include, without limitation, statements regarding: the terms, conditions, and completion of the Transaction and the Concurrent Financing; use of funds; and the business and operations of the REIT. In making the forward- looking statements contained in this press release, the Company has made certain assumptions, including that: due diligence will be satisfactory; the Concurrent Financing will be completed on acceptable terms; all applicable shareholder, and regulatory approvals for the Transaction will be received. Although the Company believes that the expectations reflected in forward-looking statements are reasonable, it can give no assurance that the expectations of any forward-looking statements will prove to be correct. 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: results of due diligence; availability of financing; delay or failure to receive board, shareholder or regulatory approvals; and general business, economic, competitive, political and social uncertainties. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this press release. Except as required by law, the Company disclaims any intention and assumes no obligation to update or revise any forward-looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward-looking statements or otherwise.

Not for distribution to United States newswire services or for dissemination in the United States. 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.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/50872