Source: GlobeNewswire (MIL-OSI)
TORONTO, April 16, 2025 (GLOBE NEWSWIRE) — Bigstack Opportunities I Inc. (“Bigstack”) (TSXV: STAK.P), a capital pool company as defined under the policies of the TSX Venture Exchange (the “TSXV” or the “Exchange”), is pleased to announce that, further to the non-binding letter of intent dated November 3, 2024 between Bigstack and Reeflex Coil Solutions Inc. (“Reeflex”) and its press releases dated November 4, 2024 and January 17, 2025, it has entered into a business combination agreement dated April 14, 2025 (the “Business Combination Agreement”) with Reeflex and 2704122 Alberta Ltd., a wholly-owned subsidiary of Bigstack (“Subco”). Reeflex and all of the shareholders (the “Coil Shareholders”) of Coil Solutions Inc. (“Coil”) have entered into a share purchase agreement dated April 14, 2025 (the “Share Purchase Agreement”).
Terms of the Transaction
The Business Combination Agreement provides for a three-cornered amalgamation (the “Business Combination”), whereby (i) Reeflex will amalgamate with Subco under the Business Corporations Act (Alberta), (ii) all of the issued and outstanding common shares in the capital of Reeflex (the “Reeflex Shares”) immediately prior to the Business Combination will be cancelled and, in consideration therefor, the holders thereof (the “Reeflex Shareholders”) will receive one common share in the capital of Bigstack (“Bigstack Share”) on the basis of one Reeflex Share for one Bigstack Share at a deemed price of $0.10 per Bigstack Share and (iii) the amalgamated corporation (the “Amalco”) will be a wholly-owned subsidiary of Bigstack, all on the terms and conditions of the Business Combination Agreement.
Prior to the completion of the Business Combination, pursuant to the Share Purchase Agreement, it is intended that Reeflex will purchase all of the issued and outstanding shares in the capital of Coil (the “Acquisition” and, together with the Business Combination, the “Transaction”) from the Coil Shareholders for aggregate consideration of $5.8 million, subject to a post-closing working capital adjustment, which is expected to be paid and satisfied by way of (i) Reeflex issuing secured non-interest bearing promissory notes to each Coil Shareholder with an aggregate principal amount equal to $1,700,000 that are to be fully paid within 5 business days of the closing of the Acquisition, (ii) Reeflex issuing secured promissory notes to each Coil Shareholder with an aggregate principal amount equal to $2,300,000 that bear interest at the prime rate published by the Bank of Canada from time to time and are paid down monthly and to be fully paid on the fifth anniversary of the closing of the Acquisition and (iii) Reeflex issuing an aggregate of 18,000,000 Reeflex Shares to the Coil Shareholders at a deemed price of $0.10 per Reeflex Share, all upon the terms and conditions of the Share Purchase Agreement.
After giving effect to the Transaction, the Reeflex Shareholders will collectively exercise control over Bigstack, Bigstack will wholly-own Amalco and Amalco will wholly-own Coil. Bigstack, as it exists upon completion of the Transaction (the “Resulting Issuer”), is expected to continue the business of Coil.
It is anticipated that all convertible securities of Bigstack will be exercised prior to completion of the Transaction; however, if any warrants to purchase common shares of Bigstack remain outstanding following the completion of the Transaction, they shall continue to be exercisable for common shares of the Resulting Issuer in accordance with their terms. It is anticipated that Bigstack will change its name to “Reeflex Solutions Inc.” on or immediately prior to the completion of the Transaction.
Immediately prior to the closing of the Transaction, it is anticipated that (i) assuming completion of the anticipated exercise of all convertible securities of Bigstack, there will be 10,662,000 Bigstack Shares issued and outstanding and (ii) holders of Reeflex Shares will hold 36,239,500 Reeflex Shares. Therefore, immediately following the closing of the Transaction, it is anticipated that there will be 46,901,500 common shares of the Resulting Issuer issued and outstanding.
Bigstack anticipates that the Transaction will constitute its Qualifying Transaction pursuant to Policy 2.4 – Capital Pool Companies of the Exchange (the “CPC Policy”), as such term is defined in the policies of the Exchange, and it is expected that Bigstack will be a Tier 2 Industrial Issuer on the Exchange upon completion of the Transaction.
The proposed Transaction is not a “Non-Arm’s Length Qualifying Transaction” as such term is defined in the CPC Policy. No Non-Arm’s Length Party to Bigstack (as such term is defined in the CPC Policy) (a) has any direct or indirect beneficial interest in Reeflex or Coil, or (b) is an insider of Reeflex or Coil. There is no relationship between or among a Non-Arm’s Length Party to Bigstack and a Non-Arm’s Length Party to the Qualifying Transaction (as such terms are defined in the CPC Policy). It is not expected that the Transaction will be subject to approval by the shareholders of Bigstack.
Completion of the Transaction is subject to a number of conditions, including but not limited to, the satisfaction of all conditions provided for in the Business Combination Agreement, which will include representations, warranties, covenants and conditions customary for a transaction of this nature, and the receipt of all necessary regulatory, corporate and third party approvals, including 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 TSXV has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
Business and History of Reeflex
Reeflex is a privately-held corporation incorporated under the Business Corporations Act (Alberta) on June 14, 2024. Its head and registered offices are located in Calgary. Reeflex currently has no business operations or assets other than cash and a management team that has been working on the Transaction and the proposed going public structure for the past year.
Business and History of Coil
Founded in 2007 in Redcliff, Alberta, Coil specializes in innovative drilling products and services for the global oil and gas industry. In 2010, Coil expanded its operations, opening a second facility in Calgary, Alberta, introducing a line of downhole fracking tools and venturing into custom tool design. In 2012, Coil launched its coil tubing injector line. In 2013, Coil opened a third facility in Red Deer, Alberta. In 2014, Coil developed two distinct models of, and manufactured, its first full coil tubing units. In 2016, Coil expanded sales to Asia, Africa, Australia, North America, South America and Europe. In 2017, Coil designed and built the largest free-standing mast unit in the world. In 2022, Coil established a dedicated manufacturing division in Calgary, Alberta, operating under its tradename, Ranglar, for injectors and mobile equipment. In 2024, Coil completed a reorganization with its shareholders, which resulted in the conversion of preferred shares and debt into common shares. Today, Coil continues to focus on coiled tubing solutions and downhole tools, offering a comprehensive range of services including rentals, sales, training, testing and consulting. With 41 employees, Coil has developed patented products that are distributed worldwide, including a key distributor in Germany and more than 60 active clients.
The following tables set out selected financial information of Coil for the periods indicated therein:
| |
Financial Year ended
2024
(audited)
($) |
Financial Year ended
2023
(audited)
($) |
| Total revenues |
14,265,524 |
14,069,331 |
| Income from continuing operations |
1,750,495 |
2,193,603 |
| Net income or loss, in total |
1,089,024 |
1,554,716 |
| Total assets |
9,969,946 |
11,752,788 |
| Total long term financial liabilities |
735,009 |
1,006,362 |
| Cash dividends |
NIL |
111,736 |
Concurrent Financing
In advance of the Transaction, Reeflex completed a non-brokered private placement of 4,139,500 subscription receipts (each, a “Subscription Receipt”) at a price of $0.20 per Subscription Receipt, for aggregate gross proceeds of $827,900 (the “Concurrent Financing”).
The gross proceeds resulting from the Concurrent Financing are (and will continue to be) held by Marrelli Trust Company Limited as subscription receipt and escrow agent until certain escrow release conditions are satisfied, including the completion of the Acquisition and the receipt of written confirmation from the TSX Venture Exchange that all conditions precedent to the Transaction have been satisfied (collectively, the “Escrow Release Conditions”). Upon satisfaction of the Escrow Release Conditions, and prior to the completion of the Transaction, the gross proceeds from the Concurrent Financing will be released from escrow and each Subscription Receipt will automatically convert into one Reeflex Share. In connection with the Concurrent Financing, Reeflex has paid to registered dealers and such other persons permitted under applicable securities laws who act as finders for the Concurrent Offering a finder’s fee an aggregate of $21,336, representing 7% of the gross proceeds resulting from subscriptions that were introduced to Reeflex by the finder. Except for the foregoing, it is not expected that any finder’s fee or commission will be payable in connection with the Transaction.
Reeflex intends to use the proceeds of the Concurrent Financing for general corporate and working capital purposes.
Resulting Issuer
The Parties expect that the Resulting Issuer following from the Transaction will carry on the existing business of Coil and be an industrial issuer focused on providing coiled tubing and downhole tool solutions to the oil and gas industry. See “Terms of the Transaction” above for details concerning the expected corporate structure of the Resulting Issuer upon completion of the Transaction.
Upon completion of the Transaction, the Parties expect that the board of directors of the Resulting Issuer will consist of the following four (4) directors, of whom three (3) will be independent. John Babic will not be independent as he will be the President and Chief Executive Officer of the Resulting Issuer.
John Babic – Proposed President, Chief Executive Officer and Director of Resulting Issuer
John Babic is an accomplished executive with nearly 40 years of experience in the oil and gas sector, covering upstream, downstream, and manufacturing operations. He currently serves as the President and CEO of 1175317 Alberta Ltd., an investment and real estate holding company.
Throughout his career, Mr. Babic has held several senior executive positions, including CEO of Reeflex Coil Solutions Inc. and CEO and Director of various public companies such as Dalmac Energy Inc., an oilfield transportation and services company; Raydan Manufacturing Inc., a manufacturer specializing in heavy-duty transportation suspension systems; Hyduke Energy Services Inc., a manufacturer of oilfield equipment, including drilling and service rigs; and Sawtooth Resources Inc., an oil and gas exploration and production company.
In addition, Mr. Babic has served for 7 years as a Director of Edmonton Economic Development Corporation, contributing to the city’s economic growth and development initiatives.
Mr. Babic holds both a Bachelor of Arts and Bachelor of Commerce degree from the University of Alberta.
Shawn Szydlowski – Proposed Director of Resulting Issuer
Shawn Szydlowski is a seasoned business leader with over 30 years of experience in corporate management, entrepreneurship, and financial oversight. As the founder of Care For A Ride, established in 2009, Mr. Szydlowski built a successful business focused on providing safe, reliable transportation for seniors, enabling them to maintain independence and quality of life.
His career also includes 15 years with Dalmac Energy, where he held key roles such as Interim CFO and Chairman of the Audit Committee. Mr. Szydlowski played a crucial role in navigating the company through complex financial challenges, ensuring regulatory compliance, and fostering sustainable growth. Additionally, he brings 20 years of experience in corporate sales and account management, where he consistently drove strategic results, earning the President’s Club Award for three consecutive years.
Eric Szustak – Proposed Director of Resulting Issuer
Mr. Szustak is currently the President, Chief Executive Officer, Chief Financial Officer, Corporate Secretary and a director of Bigstack. He is a Chartered Professional Accountant and Chartered Accountant with over 35 years’ experience in financial services, business development, marketing, accounting, and as Chief Financial Officer of various reporting issuers. Mr. Szustak is currently Chairman and Corporate Secretary of Quinsam Capital Corporation, which is a public merchant bank listed on the CSE, a director of Copper Road Resources Inc., a mining company listed on the TSXV, and a director of Nevada Organic Phosphate Inc., a fertilizer company listed on the CSE. Mr. Szustak’s previous experience also includes 14 years with three national brokerage firms: Midland Walwyn, Merril Lynch and BMO Nesbitt Burns, in various positions, including private client wealth groups, management and securities compliance. Mr. Szustak will be Chair of the Audit Committee of the Resulting Issuer in addition to his general duties as a director of the Resulting Issuer. Mr. Szustak will devote such percentage of his working time to the affairs of the Resulting Issuer as is required to fulfill his duties to the same.
Derrek Dobko – Proposed Director of Resulting Issuer
Derrek Dobko is a seasoned financial officer with over 20 years of experience in the oilfield service, manufacturing, and transportation industries. He has held senior finance positions in both public and private companies, showcasing his expertise in financial management and reporting.
As controller of Raydan Manufacturing, Mr. Dobko was responsible for the company’s financial reporting in accordance with IFRS and the preparation of all financial information required under TSXV reporting standards. His career also includes senior accounting roles at Peak Energy Services, Alta-Fab Structures, and his current position with NTS Amega Canada.
Additionally, Mr. Dobko has gained valuable operational experience in the transportation sector, particularly in managing financial operations for Liquids in Motion, a mid-sized trucking company. He holds a Bachelor of Commerce from the University of Alberta and is a Certified Professional Accountant (CPA), with a designation from CPA Alberta.
Upon completion of the Transaction, the following persons are also expected to constitute insiders of the Resulting Issuer:
Trevor Conway – Proposed Chief Financial Officer and Secretary of Resulting Issuer
Trevor Conway is an accomplished mid-market investment banking professional with extensive transaction experience across various industry sectors, including energy. He previously served as CFO of Reconciliation Energy Transition Inc., a Calgary-based energy transition project development company and as Special Advisor to BluMaple Capital Partners, a Calgary-based private equity firm focused on low-carbon energy innovators.
Prior to these roles, Mr. Conway was the Managing Director and Head of Energy Investment Banking at iA Capital Markets, a division of iA Private Wealth and part of iA Financial Group, a leading Canadian financial institution.
Mr. Conway holds an MBA from the Ivey Business School at Western University, a BA (Special) in Economics from the University of Alberta, and a Sustainable Investment Professional Certificate (SIPC) from the John Molson Executive Centre at Concordia University. He is also a former Fellow of the Canadian Securities Institute (FCSI).
In addition to his professional work, Mr. Conway has contributed to several industry and community initiatives. He has served on the National & Local Advisory Committee of the TSX Venture Exchange and was Past Director and Governor of the Canadian Energy Executive Association.
George Wu – Proposed Director of Amalco
George Wu is a distinguished financial executive with a proven track record in leading complex financial strategies and driving portfolio success. With extensive expertise in bank debt, structured finance, fixed income, and equity analysis, he excels in portfolio management and strategic financial planning. His leadership has successfully optimized portfolios, resulting in a 20% increase in returns over the past three years.
Known for his exceptional relationship-building skills, Mr. Wu has effectively engaged as a financial strategist with c-suite executives and diverse stakeholders. He holds a CFA, MBA, and B.Sc. (Honours Program) and currently serves as Portfolio Manager and Chief Compliance Officer at a leading independent portfolio management firm in Edmonton, ensuring top-tier financial stewardship and compliance.
In addition to his professional accomplishments, Mr. Wu mentors commerce undergraduates through the University of Alberta’s PRIME Program, contributing to the development of future leaders in investment management. Mr. Wu and his family have called Edmonton home since 2000, where they enjoy a multilingual household speaking English, French, and Mandarin Chinese.
Cecil Hassard – Proposed Director of Amalco
Mr. Cecil Hassard is an accomplished entrepreneur and business leader with a proven track record of driving innovation and operational excellence in the oil and gas industry. In 2007, he co-founded Coil which has grown to become a global provider of high-quality products and innovative solutions for the energy sector. He further diversified the company’s offerings by introducing the “Ranglar” division, based in Calgary, Alberta, which manufactures custom mobile equipment for industries such as oil and gas, mining, and more.
Under his leadership, Coil has established a strong presence in Canada and the United States, and in serving clients worldwide. He broadened Coil’s capabilities with the “Ranglar” division, enabling tailored solutions to a broader range of industries with specialized equipment. He has driven advancements in operational efficiency and provided cutting-edge solutions for the energy sector. Mr. Cecil Hassard’s entrepreneurial vision has established Coil as a dynamic and influential leader in the global oil and gas industry.
Bryan Hassard – Proposed Chief Operating Officer of Coil
Mr. Bryan Hassard is an accomplished business leader and co-founder of Coil, established in 2007. He serves as the Vice President of Manufacturing and a director of Coil, playing a critical role in the company’s operations and strategic direction.
Mr. Bryan Hassard’s leadership has been instrumental in expanding Coil’s sales from Canada to the United States and globally, enhancing the company’s ability to serve the oil and gas industry on a broader scale utilizing distributors in different areas. As Vice President of Manufacturing, he oversees production processes, ensuring high-quality standards and operational efficiency. Mr. Bryan Hassard’s dedication to innovation and excellence has significantly contributed to the growth and success of Coil.
Sponsorship
Sponsorship of a qualifying transaction of a capital pool company is required by the TSXV unless an exemption from the sponsorship requirement is available. Bigstack has applied for a waiver from the sponsorship requirements. There is no assurance that the Bigstack will be able to obtain such a waiver.
Trading Halt
Trading in the Bigstack Shares was halted, as previously disclosed in Bigstack’s press release dated November 4, 2024, and is not expected to resume until the Transaction is completed or until the Exchange receives the requisite documentation to resume trading.
Further updates with respect to the Transaction may be provided as the Transaction proceeds.
Overview of Bigstack
Bigstack is a “capital pool company” under the policies of the Exchange and it is intended that the Transaction will constitute the “Qualifying Transaction” of Bigstack, as such term is defined in CPC Policy. The Bigstack Shares are currently listed on the Exchange and Bigstack is a reporting issuer in the provinces of Alberta, British Columbia and Ontario. Bigstack was incorporated under the Business Corporations Act (Ontario) on November 25, 2020.
Additional Information
All information contained in this press release with respect to Reeflex and Coil was provided by Reeflex and Coil, respectively, to Bigstack for inclusion herein. Bigstack and its directors and officers have not independently verified such information and have relied exclusively on Reeflex and Coil for any information concerning Reeflex and Coil.
Forward Looking Information
This press release contains statements that constitute “forward-looking information” (“forward-looking information”) within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking information and are based on expectations, estimates and projections as at the date of this press release. Any statement that discusses predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “anticipate”, “believe”, “estimate”, “expect”, “intend” or variations of such words and phrases or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking information.
More particularly and without limitation, this press release contains forward-looking statements concerning the Transaction and its constituents steps, including the Acquisition and the Business Combination (including the completion, structure, terms and timing thereof), the binding definitive agreements relating to the Transaction, including in respect of the Acquisition, the expected capital structure and expected shareholders of, and the expected size of their shareholdings in, the Resulting Issuer, the expected corporate structure of the Resulting Issuer and its subsidiaries, if any, the future financial performance of the Resulting Issuer or any of the parties, the Concurrent Financing, including the amount expected to be raised thereunder, any finder’s fees or commissions payable in relation to the same, and expected use of proceeds therefrom, the Subscription Receipts and Escrow Release Conditions, the expected composition of the board of directors and management of the Resulting Issuer and its subsidiaries, if any, TSXV sponsorship requirements and any exemptions therefrom, the issuance of additional press releases describing the Transaction, the trading of the Bigstack Shares on the TSXV and the holding of shareholder meetings in connection with the Transaction. Although Bigstack believes that the expectations reflected in such forward-looking information are reasonable, it can give no assurance that the expectations of any forward-looking information will prove to be correct. Known and unknown risks, uncertainties and other factors may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking information. Such factors include, but are not limited to: delay or failure to receive board, shareholder or regulatory approvals; inability to complete the Concurrent Financing on the terms described herein or at all; and general business, economic, competitive, political and social uncertainties. There can be no certainty that the Transaction and related transactions will be completed on the terms set out in the Letter of Intent and other agreements among the Parties or at all. Accordingly, readers should not place undue reliance on the forward-looking information contained in this press release. Except as required by law, Bigstack disclaims any intention and assumes no obligation to update or revise any forward-looking information to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward-looking information or otherwise.
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.
Bigstack Opportunities I Inc.
For further information, please contact Eric Szustak, the President, Chief Executive Officer, Chief Financial Officer, Corporate Secretary and a director of Bigstack.
Eric Szustak
President, CEO, CFO, Corporate Secretary and Director
Email: eszustak@jbrlimited.com
Telephone: (905) 330-7948
Neither 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.
The securities have not been and will not be registered under the United States Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
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