StickIt announces LOI that includes corporate restructuring

StickIt has signed a non-binding letter of intent (LOI) with Capitalink Ltd. The proposed deal involves a corporate restructuring that includes a share consolidation (reverse stock split) and a private placement without brokers. As part of the transaction, Capitalink will acquire all rights to the amounts owed by the Company to Mr. Eli Ben Harosh and Mr. Asher Holzer, both directors of StickIt. Upon completion of the transactions described in the LOI, Mr. Asher Holzer is expected to step down as a director of the Company.

Under the proposed share consolidation, every ten existing common shares will be combined into one new share. The Company currently has 127,547,356 common shares issued and outstanding. After the consolidation, this number will be reduced to approximately 12,754,736 shares, pending regulatory approval. Any fractional shares that result from this process will be cancelled, meaning shareholders' holdings will be rounded down to the nearest whole share. All outstanding stock options will be adjusted using the same 10-to-1 ratio.

According to the Company's articles, the Board of Directors has the authority to carry out the consolidation without seeking shareholder approval. The consolidation is subject to the approval of the Canadian Securities Exchange (CSE). Once approval is obtained, the Company will issue a follow-up announcement to confirm the record date and the date when its shares will begin trading on a post-consolidation basis.

At the same time, the Company plans to conduct a private placement to raise between $700,000 and $1,050,000. The units will be sold at a 25 percent discount to the current market price of the Company's shares, as quoted on the CSE and in accordance with its pricing rules. Each unit will include one common share and one common share purchase warrant. Each warrant will allow the holder to purchase one additional common share at the market price for a period of three years from the date of issuance.

Capitalink will receive a finder's fee, paid in cash and/or securities, in line with CSE policies. The private placement is subject to CSE approval, and all securities issued will be subject to a four-month holding period. The funds raised will be used to support the Company's business operations and strengthen its working capital.