SOL Global Changes Auditor and Provides Corporate Update
SOL Global Investments Corp. (CSE: SOL) (OTC Pink: SOLCF) (FSE: 9SB) announces a change of auditors, nomination of John Zorbas to the Board, grant of DSUs, and updates on Damon Motors. The company also entered into an intercreditor agreement and received an advance from the First Lien Lender.
The change of auditors for SOL Global Investments Corp. is a significant event that may raise questions among investors regarding the company's financial transparency and governance practices. However, the absence of any reservations or modified opinions in the Former Auditor's reports suggests a smooth transition without red flags. The appointment of Zeifmans LLP, a firm with a reputable track record, could be perceived positively if investors are familiar with its standing in the industry.
Regarding the nomination of John Zorbas to the Board, it is essential to consider the potential strategic impact he could bring given his background in metals exploration, development and investment banking. This move could signal a strategic pivot or expansion for SOL Global, aligning with the company's growth objectives. The grant of 250,000 DSUs to Mr. Zorbas aligns his interests with those of the shareholders, potentially incentivizing long-term value creation.
The update on Damon Motors and its upcoming Nasdaq listing following the merger with Graffiti Holdings Inc. is of particular interest. SOL Global's indirect equity interest through House of Lithium Ltd. could result in a material return on investment, especially with Damon's pre-orders and technological advancements in the motorcycle industry. This could have a significant impact on SOL Global's financial position and future investment prospects.
The motorcycle industry is undergoing a technological transformation and Damon Motors' focus on safety and innovation positions it well within this changing landscape. The anticipated listing on Nasdaq could enhance Damon's visibility and access to capital, likely driving growth and potentially benefiting SOL Global's investment in the company. The reported US$85 million in pre-orders for Damon's products indicates strong market demand and could be a harbinger of commercial success, which would be favorable for SOL Global's market valuation.
Furthermore, the Damon Business Combination and its focus on the development of HyperFighter and HyperSport motorcycles tap into the growing electric vehicle and greentech trends. As a significant holder in House of Lithium, SOL Global's investment thesis in the greentech space appears to be validated by these developments, potentially positioning the company as a forward-thinking player in the investment community.
The intercreditor agreement between SOL Global, the First Lien Lender and the Junior Lien Lenders is a crucial legal arrangement that dictates the hierarchy of claims on the company's assets. The subordination of the Junior Lien Lenders' claims to those of the First Lien Lender is a common protective measure for senior creditors and can impact the company's financial flexibility. The additional $400,000 advance from the First Lien Lender, used to reduce accounts payables and current liabilities, suggests immediate liquidity needs but also adds to the company's debt obligations. It is vital for stakeholders to assess the terms of the Loan Agreement and the implications of the additional reporting obligations and security interests provided to the First Lien Lender.
01/09/2024 - 04:30 PM
Toronto, Ontario--(Newsfile Corp. - January 9, 2024) - SOL Global Investments Corp. (CSE: SOL) (OTC Pink: SOLCF) (FSE: 9SB) ("SOL Global " or the "Company ") today announces that it has changed its auditors from Kreston GTA LLP (the "Former Auditor ") to Zeifmans LLP (the "Successor Auditor ") effective December 7, 2023 (the "Effective Date ").
The board of directors of the Company (the "Board ") accepted the resignation of the Former Auditor and appointed the Successor Auditor as the new auditor of the Company as of the Effective Date.
There were no reservations or modified opinions in the Former Auditor's reports on the Company's financial statements for the period commencing at the beginning of the Former Auditor's appointment as auditor and ending on the date of resignation of the Former Auditor. There are no reportable events including disagreements, consultations, or unresolved issues as defined in National Instrument 51-102 – Continuous Disclosure Obligations ("NI 51-102 ") (Part 4.11) between the Company and the Former Auditor.
In accordance with NI 51-102, the notice of change of auditor, together with the required letters from the Former Auditor and the Successor Auditor, have been reviewed by the Board and filed on SEDAR+ at www.sedarplus.ca .
John Zorbas Nominated to Board of Directors
The Company is also pleased to announce that Mr. John Zorbas will be nominated to the Board by the Company's management. Mr. Zorbas' nomination will be considered by shareholders of the Company at the Company's next annual meeting of shareholders. Mr. Zorbas is an entrepreneur with a proven track record in the metals exploration and development industry and the investment banking sector. He has held senior advisory positions in various facets of business including operations, marketing, sales, strategic planning and structured finance. Mr. Zorbas is currently the President and CEO of Captor Capital Corp. He also serves as senior officer and director of several public and private companies. Mr. Zorbas holds an Honors Bachelor's in Economics from the University of Toronto.
"I welcome John's nomination to the Board. He brings experience that will contribute to the Board and benefit SOL Global on its path forward," said Paul Kania, CFO and Interim CEO.
Grant of DSUs
The Company also announces the grant of an aggregate of 250,000 deferred share units ("DSUs ") of the Company to Mr. John Zorbas, in connection with his recent nomination to the Board. The DSUs have been granted pursuant to the terms and subject to the conditions of the Company's DSU Plan, as amended. The DSUs may be settled in cash or common shares in the capital of the Company, at the sole discretion of the Board. Any common shares issued in settlement of vested DSUs will be subject to a stock exchange hold period that will expire four months and a day from the issue date of the DSUs.
Damon Motors Update
On December 14, 2023, Inpixon (NASDAQ: INPX) announced December 27, 2023 as the record date for holders of its shares that will be entitled to the distribution of Graffiti Holdings Inc. ("Grafiti ") ahead of its previously announced merger with Damon Motors Inc. ("Damon "). This action was pivotal for Damon's subsequent post-merger listing on the Nasdaq Capital Market ("Nasdaq "). CEO of Inpixon, Nadir Ali, has emphasized the substantial value for shareholders and underscored the merger's importance, highlighting Damon's strides in motorcycle safety and technology. The Damon HyperSport is expected to be one of the safest, smartest, and most powerful motorcycles available in the market. With over US$85 million in pre-orders and cutting-edge technology, Damon is poised to successfully take on the multi-billion dollar motorcycle market. Upon the completion of the business combination, the combined entity will be listed on Nasdaq, subject to the approval of an initial listing application.
SOL Global indirectly holds an equity interest of 8.5% in Damon, though its portfolio company, House of Lithium Ltd. ("HOL "). The Company announced in its press release dated October 24, 2023 that Damon and Inpixion signed a definitive business combination agreement to complete a reverse merger (the "Damon Business Combination ") with a proposed spin-off entity of Inpixon, Grafiti. Upon the completion of the Damon Business Combination, the combined company is expected to be listed on the Nasdaq, subject to the approval of an initial listing application, and will be focused on the development of Damon's famed HyperFighter and HyperSport motorcycles.
The Company invested CDN$6 million in Damon in February 2021 and made a further investment in Damon in December 2021 of US$14.25 million prior to SOL Global contributing its shares in Damon to HOL in November 2021. The Company, via House of Lithium, expects to realize a material return on investment for shareholders, further supporting its thesis for the Greentech space. SOL Global currently holds 63.06% of the equity in House of Lithium on an undiluted basis.
Intercreditor Agreement
The Company further announces that it has entered into an intercreditor agreement (the "Intercreditor Agreement ") dated as of January 2, 2024 between the Company, as debtor, Braebeacon Holdings Inc. (the "First Lien Lender ") and certain management and other third party creditors of the Company (collectively, the "Junior Lien Lenders "), governing the parties' rights, obligations and security as between the Junior Lien Lenders and the First Lien Lender and as between the Junior Lien Lenders among themselves. In accordance with the Intercreditor Agreement, among other things, the Junior Lien Lenders have agreed that their rights and security shall rank subordinate to those of the First Lien Lender.
In addition, the Company also announces that it has been advanced an additional $400,000 (the "Advance ") from the First Lien Lender in connection with which it has entered into an amended accommodation agreement to the loan agreement between the First Lien Lender and the Company dated August 6, 2023, as amended from time to time (collectively, the "Loan Agreement "). The Loan Agreement provides for certain requirements of the Company to continue repayment of the total loan thereunder, additional reporting obligations and confirmation of certain security interests provided to the First Lien Lender. The Advance was used to reduce accounts payables and current liabilities of the Company.
About SOL Global Investments Corp.
SOL Global is a diversified international investment and private equity holding company engaged in the small and mid-cap sectors. The Company's investment partnerships range from minority positions to large strategic holdings with active advisory mandates. The Company's primary business segments include Retail (QSR & Hospitality), Technology (with a focus on Clean-Tech and Electric Vehicles), Esports and Gaming, New Age Wellness and commercial real estate.
CONTACT INFORMATION SOL Global Investments Corp.info@solglobal.com
Cautionary Statements
This press release contains "forward-looking information" within the meaning of applicable securities laws. All statements contained herein that are not clearly historical in nature may constitute forward-looking information. In some cases, forward-looking information can be identified by words or phrases such as "may", "will", "expect", "likely", "should", "would", "plan", "anticipate", "intend", "potential", "proposed", "estimate", "believe" or the negative of these terms, or other similar words, expressions and grammatical variations thereof, or statements that certain events or conditions "may" or "will" happen, or by discussions of strategy. The forward-looking information contained in this press release includes, without limitation, the Company's business and strategic plans, the obligations of the Company under the Intercreditor Agreement and the Loan Agreement, and the completion of the anticipated Damon Business Combination between Damon and Inpixon and the subsequent Nasdaq-listing of the combined entity.
Forward-looking information is based upon certain material assumptions that were applied in drawing a conclusion or making a forecast or projection, including management's perceptions of historical trends, current conditions and expected future developments, as well as other considerations that are believed to be appropriate in the circumstances. While we consider these assumptions to be reasonable based on information currently available to management, there is no assurance that such expectations will prove to be correct.
By their nature, forward-looking information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. A variety of factors, including known and unknown risks, many of which are beyond our control, could cause actual results to differ materially from the forward-looking information in this press release including the inability or failure of the Company's portfolio companies to execute their business and strategic plans as contemplated or at all; the inability or failure of Damon to complete the Damon Business Combination with Inpixon as planned or at all; the receipt of all applicable stock exchange and regulatory approvals for the Damon Business Combination with Inpixon; the ability of the Company to service its debt; the Company's ability to obtain additional financing from time to time to pursue its business objectives; changes in national or regional economic, legal, regulatory and competitive conditions and a resurgence in the COVID-19 pandemic; the Company's reliance on management; not adding new assets to the Company's portfolio; adverse market and economic conditions; inflation; the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses; costs of inputs; currency fluctuations; competition; and loss of key management and/or employees. Additional risk factors can also be found in the Company's current MD&A, which has been filed on SEDAR+ and can be accessed at www.sedarplus.ca . Readers are cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking information.
The forward-looking information contained herein is made as of the date of this press release and is based on the beliefs, estimates, expectations and opinions of management on the date such forward-looking information is made. The Company undertakes no obligation to update or revise any forward-looking information, whether as a result of new information, estimates or opinions, future events or results or otherwise or to explain any material difference between subsequent actual events and such forward-looking information, except as required by applicable law.
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What is the ticker symbol for SOL Global Investments Corp.?
The ticker symbol for SOL Global Investments Corp. is CSE: SOL, OTC Pink: SOLCF, FSE: 9SB.
What change did SOL Global Investments Corp. announce regarding its auditors?
SOL Global Investments Corp. changed its auditors from Kreston GTA LLP to Zeifmans LLP effective December 7, 2023.
Who is being nominated to the Board of SOL Global Investments Corp.?
Mr. John Zorbas is being nominated to the Board of SOL Global Investments Corp.
What are DSUs granted by SOL Global Investments Corp.?
SOL Global Investments Corp. granted 250,000 deferred share units to Mr. John Zorbas.
What updates were provided about Damon Motors Inc.?
Damon Motors Inc. announced a record date for the distribution of Graffiti Holdings Inc. ahead of its merger with Damon, emphasizing the substantial value for shareholders and the Damon HyperSport.
What is the equity interest of SOL Global Investments Corp. in Damon Motors Inc.?
SOL Global Investments Corp. indirectly holds an equity interest of 8.5% in Damon Motors Inc. through its portfolio company, House of Lithium Ltd.
What agreement did SOL Global Investments Corp. enter into?
SOL Global Investments Corp. entered into an intercreditor agreement governing the rights, obligations, and security between the First Lien Lender and certain management and other third party creditors.
What was the purpose of the $400,000 advance received by SOL Global Investments Corp.?
The $400,000 advance received by SOL Global Investments Corp. from the First Lien Lender was used to reduce accounts payables and current liabilities of the Company.
