Keon Capital Inc. Announces Proposed Transaction with Frame Holdings Inc.
Keon Capital Inc. (TSXV: KEON.H) is excited to announce that it has entered into a letter of intent (LOI) dated October 28, 2023, regarding the proposed acquisition of Frame Holdings Inc. (Frame). The LOI outlines the intention for Keon and Frame to draft, negotiate, and execute a definitive agreement (Definitive Agreement) for the transaction. This acquisition will be considered a "Change of Business" and a "Reverse Takeover" for Keon under the TSX Venture Exchange's Policy 5.2.
Frame Holdings Inc., incorporated in November 2022, is a start-up manufacturer and seller of tiny prefabricated homes based in North Vancouver, British Columbia. The company is focused on elegant minimalist design and sustainable, socially-responsible practices. Frame intends to sell its homes to direct consumers (homeowners) and land bankers and property developers, offering a turnkey solution. Currently, no shareholder of Frame holds more than 7% of the issued and outstanding shares.
The Transaction Details
The proposed transaction will be structured as a three-cornered amalgamation, with Frame amalgamating with a newly incorporated subsidiary of Keon and becoming a wholly-owned subsidiary of Keon. Shareholders of Frame will receive one common share in Keon for each outstanding common share of Frame. Keon is expected to issue approximately 40,000,000 Keon shares to Frame shareholders.
In connection with the transaction, Keon plans to conduct a 2.8:1 share consolidation of its common shares and complete an equity financing through a private placement. The closing of the transaction is subject to various conditions, including the completion of the share consolidation, the private placement, and approvals from the TSX Venture Exchange and Frame shareholders.
The proposed transaction between Keon Capital Inc. and Frame Holdings Inc. presents an exciting opportunity for both companies. Keon aims to expand its business through this acquisition, while Frame has the potential to benefit from Keon's resources and expertise. The completion of the transaction is subject to certain conditions, and further details will be provided in future news releases.
The proposed transaction between Keon Capital Inc. and Frame Holdings Inc. could significantly impact new businesses in the prefabricated homes industry. Frame's innovative approach to home manufacturing, with a focus on minimalist design and sustainable practices, has the potential to disrupt the market, setting a new standard for competitors. As a result of the acquisition, Keon's resources and expertise could accelerate Frame's growth, making it a formidable competitor for new entrants.
Moreover, the transaction's structure as a "Reverse Takeover" could set a precedent for similar deals in the industry, potentially influencing the strategies of new businesses seeking growth opportunities. The amalgamation aspect of the deal could also encourage new businesses to consider strategic partnerships and mergers as a viable path to expansion.
However, the transaction also presents challenges. The consolidation of Keon shares and the requirement for approvals from various entities add layers of complexity that could deter new businesses from pursuing similar paths. Nonetheless, the potential benefits of such a transaction could outweigh these challenges, particularly for businesses aiming for rapid growth and market disruption.