Update on the Acquisition of the Being AI Group
11 March 2024
NZX Limited
Update on the Acquisition of the Being AI Group
Last December ACE announced that it had entered into an agreement to acquire the “Being AI Group”,
a diversified artificial intelligence services, development and investment business (Transaction).
ACE is pleased to report that:
1. The documentation in support of the Transaction has been finalised.
2. The following Transaction documents accompany this announcement:
(a) The Notice of Special Meeting of Shareholders.
(b) The Listing Profile Document.
(c) The Independent Advisor’s Report and Appraisal Report.
(d) The Proxy Form.
3. The above documents are being sent to shareholders this week.
4. The Special Meeting of Shareholders, to approve the Transaction, will be held by virtual meeting on
Thursday 28 March, at 10 am.
Upon shareholder approval being obtained, we would expect to complete the Transaction on 28 March, and
that the shares in the Company (to be renamed Being AI Limited, ticker code “BAI”) will be requoted on the
NZX Main Board on Tuesday, 2 April 2024.
The Board considers that the Transaction represents a unique opportunity for the Company and its
shareholders, and requests that all shareholders read the Listing Profile Document, Independent Advisor’s
Report and Appraisal Report, and the Notice of Special Meeting.
The Board is pleased to present the Being AI acquisition to you for your consideration.
We look forward to seeing you at the Virtual Special Meeting of Shareholders on Thursday 28
th
March 2024.
Yours sincerely
Sean Joyce
Director
Ascension Capital Limited
email: sean@corporate-counsel.co.nz
mobile: 021 865 704
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100592663/3454-7128-3498.23
ASCENSION CAPITAL LIMITED
NOTICE OF SPECIAL MEETING OF
SHAREHOLDERS
11 March 2024
If you have sold or otherwise transferred all of your shares in Ascension Capital Limited, please pass this
Notice of Meeting, together with the accompanying documents, as soon as possible to the purchaser or
transferee or to the broker or other person who arranged the sale or transfer of your shares.
CHAIR’S LETTER
11 March 2024
Dear shareholders,
The Board of Ascension Capital Limited (Company or ACE) is seeking shareholder approval to progress a
significant operational and capital restructure involving the acquisition of several businesses to be
collectively branded “Being AI” (Being AI), as announced to the market on 11 December 2023.
Being AI will comprise of a recently launched diversified start-up artificial intelligence services,
development and investment business, together with two mature business enterprises (Being AI
Group).
The proposed restructure of ACE can be best described as a reverse takeover transaction, often referred
to as an “RTO”.
The in-substance commercial effect of the restructure is that ACE would acquire the Being AI business in
return for the issue of 1,800,000,000 new ACE shares to the existing Being AI shareholders.
1
In
conjunction with the acquisition of Being AI, ACE would also issue up to 166,520,000 new ACE shares to
a number of third parties (including directors) who have agreed to capitalise their ACE indebtedness,
and potentially to a number of financial investors into ACE. The details of these various allotments of
ACE shares are referred to below.
The implications for ACE and its shareholders are that existing shareholders would be diluted down from
owning 100% of ACE. However, ACE currently has negative shareholders’ funds and negligible assets.
• A description of the Being AI Group is contained in section 3 of the Listing Profile available at
www.nzx.com/companies/ACE/announcements;
• A diagram showing the structure of ACE before and after completion of the reverse listing
transaction and restructure is contained in section 3 of the Listing Profile;
• The acquisition of Being AI constitutes a “reverse listing” transaction, whereby the Being AI Group
essentially becomes listed on the NZX Main Board by virtue of its acquisition by ACE; and
• The acquisition also constitutes a “major transaction” under the Companies Act and the NZX Listing
Rules.
Principal components of the Restructure
The restructure comprises the following transactions (together, the Restructure):
• The purchase of 100% of the shares on issue in Being Consultants Limited, AGE Limited and Send
Global Limited for initial total consideration of $45 million (Reverse Listing Transaction). Of this
initial consideration, $25 million is for the purchase of Send Global Limited, $15 million is for the
purchase of AGE Limited and $5 million is for the purchase of Being Consultants Limited.
• To satisfy the initial purchase price, ACE will issue 1,800,000,000 fully paid ordinary ACE shares at an
issue price of $0.025 per share to the separate vendors or their nominees (Consideration Shares).
1
In addition to the 1,800,000,000 new ACE shares to be issued to the vendors of the Being AI business on the completion of
the Restructure, there is the potential for a further 1,399,992,000 ACE shares to be issued to several of the vendors of the
Being AI businesses on account of an adjustment of the total purchase price payable to those parties if certain share price
milestones are achieved (Earn-In Mechanism).
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• Given the quantum of the Consideration Shares to be issued to 2061 LP (one of the vendors), as a
percentage of the existing ACE shares on issue, exceeds 20% of the total number of shares on issue
in ACE post-completion of the Reverse Listing Transaction and the Restructure, an exception to the
Takeovers Code applies to the issue of those Consideration Shares.
• In addition to the issue of the Consideration Shares, and subject to the future attainment of certain
share price milestones, pursuant to an “earn-in” mechanism, the consideration payable to the
vendors of Being Consultants Limited may be increased by up to a further $35 million (in addition to
the initial consideration for the Being Consultants Limited business) of $5 million. This would
increase the total consideration payable for the Reverse Listing Transaction to up to $80 million.
This “earn-in” would be satisfied by the issue of up to a further maximum 1,399,992,000 additional
fully paid ordinary ACE shares at an issue price of not less than $0.025 per share (Earn-In Shares).
Given the quantum of the Earn-In Shares that may be issued as a percentage of the existing ACE
shares on issue, potentially may exceed 20% of the total number of shares on issue in ACE post
completion of the Reverse Listing Transaction, an exception to the Takeovers Code also applies to
the issue of the Earn-In Shares.
• In conjunction with the completion of the Reverse Listing Transaction, $768,000 of the principal
indebtedness of ACE to Excalibur Capital Partners Limited, a company controlled by Sean Joyce, a
director of ACE, will be capitalised into 30,720,000 fully paid ordinary ACE shares at an issue price of
0.025 per share (Excalibur Shares).
• In conjunction with the completion of the Reverse Listing Transaction, up to $395,000 of accrued
and unpaid directors’ fees will be capitalised into 15,800,000 fully paid ordinary ACE shares at an
issue price of $0.025 per share (Directors’ Fee Shares).
• The issue of the Excalibur Shares and the Directors’ Fee Shares would ensure that ACE is largely
debt free, with the exception of any amounts owing to any sundry trade creditors incurred in the
ordinary course of business.
• ACE may, as part of the Restructure, undertake a capital raising initiative at an issue price at not less
than $0.025 per share (Capital Raise Shares). It is unlikely this capital raising initiative will be
undertaken prior to settlement of the Restructure, and therefore the Restructure is not conditional
on this capital being raised.
• The issue of up to 132,000,000 new share options to employees, contractors and non-executive
directors of ACE (including the Being AI Group) post completion of the Reverse Listing Transaction.
• Should the Restructure proceed, the issue of the 1,800,000,000 Consideration Shares, the
30,720,000 Excalibur Shares, 15,800,000 Directors’ Fee Shares and up to 120,000,000 Capital Raise
Shares would mean that existing ACE shareholders will be significantly diluted. However ACE
shareholders would cease to be invested in a non-trading investment company in search of a new
direction, and instead have an investment in the diversified businesses described in this document
and the accompanying Listing Profile.
The Restructure values the Company in its current state at approximately $1.7 million, including the
Company’s current indebtedness and prospective debt as at the date of completion of the Restructure.
In the Board’s opinion, this represents a fair valuation of the Company having regard to the Company’s
anticipated negative asset position as at the completion date for the Restructure, and the intangible
value of the Company as a “listed shell”.
The issue price of not less than $0.025 for each of the share issued under the Restructure was derived
from the last price that shares in the Company were issued for and, as above, is representative of the
Company’s value as a “listed shell”. Please read section 10 of the Independent Adviser’s Report and
Appraisal Report commissioned by ACE from Armillary Limited for further information relating to the
valuation of the Company and the issue price for the new share issues.
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What ACE will look like after completion of the Restructure
Following completion of the Restructure, the Company would:
• Have a total of 1,868,018,828 shares on issue, after the issue of the Consideration Shares, the
Excalibur Shares, and the Directors’ Fee Shares, and a total of 1,988,018,828 shares on issue if the
Capital Raise Shares are issued.
• The Consideration Shares, Excalibur Shares, Directors’ Fee Shares and Capital Raise Shares would
make up the following percentages of all shares on issue immediately after completion of the
Restructure:
Nature of Shares on issue, or to be
issued
Ordinary
Shares
% of Total Share
Capital following
Restructure
(excluding Capital
Raise Shares)
% of Total Share
Capital following
Restructure
(including Capital
Raise Shares)
Current shares on issue
21,498,828 1.15% 1.08%
Consideration Shares to be issued
1,800,000,000 96.35% 90.54%
Directors’ Fee Shares to be issued
15,800,000 0.85% 0.79%
Excalibur Shares to be issued
30,720,000 1.64% 1.55%
Capital Raise Shares to be issued
120,000,000 n/a 6.04%
Total
1,988,018,828
100.00% 100.00%
• The dilutionary impact of the issue of the new shares in the Company to be issued as part of the
Restructure is 98.85% if the Capital Raise Shares are not issued and is 98.92% if the Capital Raise
Shares are issued.
Further details of the share structure of the company following completion of the Restructure are set
out in the Explanatory Notes to Resolutions 1 to 12 of this Notice of Meeting and in the Independent
Adviser’s Report and Appraisal Report that accompanies this Notice of Meeting.
Key Risks associated with the Reverse Listing Transaction
As with any acquisition, the proposed purchase of the shares presents a number of risks that should be
drawn to the attention of ACE shareholders.
The Board considers the most significant risk factors that could affect the Being AI Group, and by
extension the value of ACE shares are:
• Dependence on key personnel – applicable to all of Being Consultants Limited, Send Global and AGE
Limited.
• Significant competition in relevant sectors – applicable primarily to Send Global Limited.
• Reliance on securing significant contracts – applicable primarily to Being Consultants Limited.
• Failure to effectively manage growth opportunities – applicable to all business divisions within the
Being AI Group.
• Unsuccessful entry into new geographical markets and verticals – applicable primarily to Send
Global Limited and Being Consultants Limited.
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• Failure to raise sufficient capital to implement business strategies – applicable to all business
divisions within the Being AI Group.
• Significant legal and regulatory changes – applicable to Being Consultants Limited and AGE Limited.
The above risk factors are described in more detail in section 6 of the Listing Profile (Risks to the Being AI
Group’s business and plans).
The documentation provided to you includes an Independent Adviser’s Report and Appraisal Report
commissioned by ACE from Armillary Limited. The report contained an overview and executive summary
at Section 2. Section 4 evaluates the merits of the Transaction for the purposes of the Takeovers Code,
and Section 5 evaluates the fairness of some of the component transactions for the purposes of the
Listing Rules.
Other matters to be considered
In conjunction with the Restructure, the following resolutions are also proposed to be considered at the
Special Meeting:
• The appointment of three new directors of the Company. On completion of the Restructure,
existing directors Keith Jackson, John Cilliers will resign and each of David McDonald, Katherine
Allsopp-Smith and Joe Jensen will be appointed as directors of the Company. Co-owner of 2061 LP,
Evan Christian, will be appointed as an alternate director for Katherine Allsopp-Smith (and will be
entitled to attend a board meeting in her place if she is not able to attend a board meeting). Roger
Gower will continue as an Independent Director and Joe Jensen will be appointed as Independent
Directors of ACE following completion of the Restructure. On completion of the Reverse Listing,
Sean Joyce will be appointed as Executive Chair of the Company;
• An increase of $220,000 to the sum of directors’ fees payable – from a pool of $80,000 per annum
to an aggregate sum not exceeding $300,000 per annum;
• The approval to issue up to 280,000,000 additional new ordinary fully paid shares during the course
of the next 12 months at an issue price not less than $0.025 per share;
• The adoption of a new Constitution for the Company, which represents an update of the existing
Constitution of the Company to reflect changes to the NZX Listing Rules and the Companies Act; and
• A change to the auditor of the Company to William Buck.
The settlement of the Restructure is conditional upon resolutions 1 to 12 being approved.
Board recommendation
The Board considers that the Reverse Listing Transaction and the Restructure represents an exciting
opportunity for the Company and its shareholders.
In the view of the Board, the AI sector is dynamic, fast-growing and innovative, and represents a
fantastic investment opportunity for the Company. Through its various entities, which will comprise of a
diversified AI services, deployment and investment business, together with two mature businesses, the
Board is of the view that Being AI will be equipped to take advantage of the growth opportunities in the
AI sector.
The Board strongly recommends that all shareholders read the Profile, the Independent Advisor’s
Report and Appraisal Report that accompany this Notice of Special Meeting.
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The Board of Ascension Capital Limited is very pleased to present the Being AI acquisition to
shareholders for their consideration. We encourage shareholders to approve all of the resolutions at the
Special Meeting.
Yours faithfully
Keith Jackson
Chair
Ascension Capital Limited
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
Notice is given that the Special Meeting of Shareholders of Ascension Capital Limited (Company) will be
by video conference on 28 March 2024 at 10am.
The Explanatory Notes which accompany this Notice of Meeting set out the details of the transactions
that are the subject of the resolutions and the approval required for each resolution by the shareholders
of the Company pursuant to the NZX Listing Rules (Listing Rules), the Companies Act 1993 (Act), the
constitution of the Company (Constitution) and the Takeovers Code (Code).
VIRTUAL SHAREHOLDER MEETING
To participate in the meeting online please use the following link to ACE’s virtual meeting
platform: meet.google.com/zxn-bxdn-anx
Shareholders are recommended to vote by appointing a directed proxy before the meeting.
Votes may also be recorded online by email to corporateactions@computershare.co.nz during
the meeting.
BUSINESS OF THE MEETING
1. Acquisition of 100% of the shares on issue in Being Consultants Limited, AGE Limited and Send
Global Limited (“Being AI Group”) – Special Resolution – Listing Rules 4.14.1, 5.1.1 and 5.2.1, and
Section 129 of the Companies Act 1993
To consider and, if thought fit, pass the following resolution as a special resolution of the Company:
"The Reverse Listing Agreement entered into between the Company and the shareholders of the
Being AI Group (“Sale Agreement”), pursuant to which the Company has agreed to acquire 100% of
the shares on issue in the Being AI Group (“Being AI Shares”) for an initial purchase price of $45
million and an additional purchase price payable of up to $35 million, which would bring the total
purchase price payable to up to $80 million. This consideration will be satisfied by the issue of:
(a) in respect of the initial purchase price payable of $45 million, 1,800,000,000 new ordinary fully
paid shares in the Company, at an issue price of $0.025 cents per share, to the shareholders of
the Being AI Group (or their nominees); and
(b) in respect of the additional purchase price payable of up to $35 million and subject to the
achievement of certain share price milestones pursuant to an earn-in mechanism referred to in
resolution 1, up to a further 1,399,992,000 new ordinary fully paid shares in the Company, at an
issue price of not less than $0.025 cents per share, to the shareholders of Being Consultants
Limited (or their nominees);
and the transactions described in the Sale Agreement are approved, and that the Directors be
authorised to take all actions, do all things and execute all documents and agreements necessary or
considered by them to be expedient to give effect to such transactions. Without limiting this
resolution, in the event that a vendor is liable to the Company under a valid breach of warranty
claim, the Company at the election of the relevant vendor, is approved to acquire and cancel shares
in the Company for the amount of a valid claim at the greater of:
(a) $0.025 cents per share; and
(b) the volume weighted average price of the Company’s shares traded on the NZX Main Board in
the 20 business days prior to the date of cancellation.”
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The implementation of this resolution is conditional upon all of Resolutions 1 to 12 being approved
by the shareholders of the Company.
2. Issue of 1,800,000,000 ordinary fully paid shares to the shareholders of the Being AI Group
(“Consideration Shares”) – Ordinary Resolution – Listing Rules 4.1.1 and 5.2.1, and Rule 7(d) of
the Takeovers Code
If resolution 1 is passed, to consider, and if thought fit, pass the following resolution as an ordinary
resolution of the Company:
"The Directors of the Company are authorised to issue 1,800,000,000 ordinary fully paid shares in
the Company to the shareholders of the Being AI Group or their nominees as specified in the
Explanatory Notes to resolution 2, at an issue price of $0.025 per share in satisfaction of the initial
purchase price payable of $45 million under the Sale Agreement (“Consideration Shares”) on the
date of the completion of the acquisition of the Being AI Group, and are further authorised to take
all actions, do all things and execute all documents and agreements necessary or considered by
them to be necessary or expedient to issue the Consideration Shares, such Consideration Shares
when issued, shall rank pari passu (equally) with all existing ordinary shares of the Company."
The implementation of this resolution is conditional upon all of resolutions 1 to 12 being approved
by the shareholders of the Company.
3. Issue of up to 1,399,992,000 additional ordinary fully paid shares to the shareholders of Being
Consultants Limited (“Earn-In Shares”) – Ordinary Resolution – Listing Rule 4.1.1 and Rule 7(d) of
the Takeovers Code
If resolution 2 is passed, to consider, and if thought fit, pass the following resolution as an ordinary
resolution of the Company:
"The Directors of the Company are authorised to:
(a) issue a maximum of up to 1,399,992,000 ordinary fully paid shares in the Company to the
shareholders of Being Consultants Limited as specified in the Explanatory Notes to resolution 3,
at an issue price of not less than $0.025 per share in satisfaction of the Company’s prospective
obligations under the Sale Agreement in respect of the possible increase to the purchase price
payable by the Company to acquire the shares in Being Consultants Limited in accordance with
the earn-in mechanism detailed in the Explanatory Notes to Resolution 3 (“Earn-In Shares”);
and
(b) take all actions, do all things and execute all documents and agreements necessary or
considered by them to be necessary or expedient to issue the Earn-In Shares, such Earn-In
Shares if issued, shall rank pari passu (equally) with all existing ordinary shares of the
Company."
The implementation of this resolution is conditional upon all of resolutions 1 to 12 being approved
by the shareholders of the Company.
4. Issue of 120,000,000 new ordinary fully paid shares to investors (“Capital Raise Shares”) –
Ordinary Resolution – Listing Rule 4.1.1
If resolution 3 is passed, to consider, and if thought fit, pass the following resolution as an ordinary
resolution of the Company:
"The Directors of the Company are authorised to:
(a) issue up to 120,000,000 ordinary fully paid shares in the Company to investors (“Capital Raise
Shares”) at an issue price of not less than $0.025 per Capital Raise Shares; and
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(b) take all actions, do all things and execute all documents and agreements necessary or
considered by them to be necessary or expedient to issue the Capital Raise Shares,
such Capital Raise Shares when issued, shall rank pari passu (equally) with all existing ordinary
shares of the Company."
The implementation of this resolution is conditional upon all of resolutions 1 to 12 being approved
by the shareholders of the Company.
5. Issue of 30,720,000 new ordinary fully paid shares to Excalibur Capital Partners Limited
(“Excalibur Shares”) – Ordinary Resolution – Listing Rules 4.1.1 and 5.2.1
If resolution 4 is passed, to consider, and if thought fit, pass the following resolution as an ordinary
resolution of the Company:
"The Directors of the Company are authorised to:
(a) issue 30,720,000 ordinary fully paid shares in the Company to Excalibur Capital Partners
Limited (“Excalibur Shares”) at an issue price of $0.025 per Excalibur Share; and
(b) take all actions, do all things and execute all documents and agreements necessary or
considered by them to be necessary or expedient to issue the Excalibur Shares,
such Excalibur Shares when issued, shall rank pari passu (equally) with all existing ordinary shares of
the Company."
The implementation of this resolution is conditional upon all of resolutions 1 to 12 being approved
by the shareholders of the Company.
6. Issue of 15,800,000 new ordinary fully paid shares to all existing ACE Directors and one former
ACE Director (“Directors’ Fee Shares”) in satisfaction of accrued Directors Fees – Ordinary
Resolution – Listing Rules 4.2.1 and 5.2.1
If resolution 5 is passed, to consider, and if thought fit, pass the following resolution as an ordinary
resolution of the Company:
"The Directors of the Company are authorised to:
(a) issue 15,800,000 new ordinary fully paid shares in the Company to the existing directors of the
Company and one former director of the Company (“Directors’ Fee Shares”) at an issue price of
$0.025 per share, which shares shall be issued to existing and former directors in satisfaction of
their accrued and unpaid directors’ fees up to the date of the completion of the Restructure;
and
(b) take all actions, do all things and execute all documents and agreements necessary or
considered by them to be necessary or expedient to issue the Directors’ Fee Shares,
such Directors’ Fee Shares when issued, shall rank pari passu (equally) with all existing ordinary
shares of the Company."
The implementation of this resolution is conditional upon all of resolutions 1 to 12 being approved
by the shareholders of the Company.
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7. Appointment of David McDonald as Director – Ordinary Resolution
If resolution 6 is passed, to consider and, if thought fit, pass the following resolution as an ordinary
resolution of the Company:
"David McDonald be appointed as a director of the Company with effect from completion of the
Restructure."
The implementation of this resolution is conditional upon all of resolutions 1 to 12 being approved
by the shareholders of the Company.
8. Appointment of Katherine Allsopp-Smith as Director – Ordinary Resolution
If resolution 7 is passed, to consider and, if thought fit, pass the following resolution as an ordinary
resolution of the Company:
"Katherine Allsopp-Smith be appointed as a director of the Company with effect from completion of
the Restructure."
The implementation of this resolution is conditional upon all of resolutions 1 to 12 being approved
by the shareholders of the Company.
9. Appointment of Joe Jensen as Director – Ordinary Resolution
If resolution 8 is passed, to consider and, if thought fit, pass the following resolution as an ordinary
resolution of the Company:
"Joe Jensen be appointed as a director of the Company with effect from completion of the
Restructure."
The implementation of this resolution is conditional upon all of resolutions 1 to 12 being approved
by the shareholders of the Company.
10. Approval of Directors’ Fees – Ordinary Resolution
If resolution 9 is passed, to consider and, if thought fit, pass the following resolution as an ordinary
resolution of the Company:
"That the aggregate maximum amount of fees which can be paid to the Directors be increased by
$220,000 from the current pool of $80,000 per annum to an aggregate sum not exceeding
$300,000 in respect of each financial year, where such amount (or lesser amount determined by the
Directors for a financial year) will be divided among the Directors in such proportion and in such
manner as they may agree."
The implementation of this resolution is conditional upon all of resolutions 1 to 12 being approved
by the shareholders of the Company.
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11. Issue of up to 132,000,000 Options to Employees, Contractors, and Non-executive Directors -
Ordinary Resolution – Listing Rule 4.2.1
If resolution 10 is passed, to consider and, if thought fit, pass the following resolution as an
ordinary resolution of the Company:
"The Directors of the Company are authorised to:
(a) issue up to 132,000,000 options to acquire ordinary shares in the Company, to employees,
contractors, and to non-executive Directors of the Company on the terms set out in the
Explanatory Notes accompanying this Notice of Meeting; and
(b) take all action, do all things, and execute all documents and agreements necessary or
considered by them to be expedient to give effect to the issue of the options.”
The implementation of this resolution is conditional upon all of resolutions 1 to 12 being approved
by the shareholders of the Company.
12. Issue of up to 280,000,000 new ordinary fully paid shares to third parties (“Post Completion
Shares”) – Ordinary Resolution – Listing Rule 4.2.1
If resolution 11 is passed, to consider, and if thought fit, pass the following resolution as an ordinary
resolution of the Company:
"The Directors of the Company are authorised to:
(a) issue up to 280,000,000 new ordinary fully paid shares in the Company to third parties (“Post
Completion Shares”) at an issue price of not less than $0.025 per Post Completion Share, at any
time during the course of the 12 month period following the date of the Special Meeting; and
(b) take all actions, do all things and execute all documents and agreements necessary or
considered by them to be necessary or expedient to issue the Post Completion Shares,
such Post Completion Shares when issued, shall rank pari passu (equally) with all existing ordinary
shares of the Company."
The implementation of this resolution is conditional upon all of resolutions 1 to 12 being approved
by the shareholders of the Company.
13. Revocation of existing constitution and adoption of a new constitution – Special Resolution
To consider, and if thought fit, pass the following resolution as a special resolution of the Company:
“That the existing constitution of the Company is revoked, and the form of constitution tabled at
the Meeting, and referred to in the Explanatory Notes to Resolution 14 of this Notice of Meeting, is
adopted as the constitution of the Company.”
The implementation of this resolution is not conditional upon all of resolutions 1 to 12 and 14
being approved by the shareholders of the Company.
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14. Appointment of William Buck as auditor and authorisation of the Board to fix auditor’s
remuneration
To consider, and if thought fit, pass the following resolution as an ordinary resolution of the
Company:
“To appoint William Buck Audit (NZ) Limited as the auditor of the Company and that the Board be
authorised to fix the fees and expenses of William Buck Audit (NZ) Limited as auditor of the
Company for the ensuing year.”
The implementation of this resolution is not conditional upon all of resolutions 1 to 13 being
approved by the shareholders of the Company.
NOTES
1. EXPLANATORY NOTES
Explanatory Notes for Resolutions 1 to 14 are set out in the following pages. Additional
information about the subject matter of the resolutions is contained in the Profile, the
Independent Adviser’s Report and Appraisal Report that accompany this Notice of Meeting.
2. PROXIES
All shareholders of the Company entitled to attend and vote at the meeting are entitled to appoint
a proxy to attend and vote for them instead.
A proxy need not be a shareholder of the Company.
The Chairman of the meeting can be a proxy for a shareholder if a shareholder wishes to appoint
the Chairman as its proxy in the proxy form. The Chairman proposes to vote any undirected proxies
held by him in favour of all of the resolutions unless voting as proxy in accordance with the express
instructions of the appointing shareholder, or if the Chairman is expressly prohibited from voting
on a particular resolution.
A proxy form is enclosed and to be effective must be lodged at least 48 hours before the meeting is
due to begin (i.e., before 10am on 26 March 2024) with Computershare Limited, the Company’s
share registrar, in accordance with the instructions in the Notes to the proxy form accompanying
this Notice.
3. VOTING RESTRICTIONS
Any shareholders of the Company, and their Associated Persons (as that term is defined in the
Listing Rules), who are to receive any of the securities, as referred to in resolutions 2, 3, 4, 5, 6, 11
or 12 are not entitled to vote in respect of those resolutions.
The shareholders of the Being AI Group of Companies (“Vendors”) or their nominees (including Te
Turanga Ukaipo and Excaliabur Capital Partners Limited) and any Associates (as that term is
defined in the Code) or Associated Persons (as that terms is defined in the NZX Listing Rules) of
those persons who are to receive any of the securities referred to in resolution 2 or 3 are not
entitled to vote in respect of that resolution in accordance with Rule 17(2) of the Code.
No director of the Company or their Associated Persons are entitled to vote on resolution 6 or 10
by virtue of NZX Listing Rule 6.3. Those persons are restricted from acting as discretionary proxies
(but can act as a non-discretionary proxy).
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Excalibur Capital Partners Limited and its Associated Persons are not entitled to vote on resolution
2 or 5 by virtue of NZX Listing Rule 6.3. Those persons are restricted from acting as discretionary
proxies (but can act as a non-discretionary proxy).
All persons registered on the Company’s register of shareholders as the holders of shares as at
5pm on 26 March 2024 shall, subject only to the preceding restrictions, be entitled to vote at the
Meeting in person or by proxy.
4. CONDITIONAL NATURE OF RESOLUTIONS 1 to 12 (INCLUSIVE)
The implementation of resolutions 1 to 12 are conditional upon all of resolutions 1 to 12 being
approved by the shareholders of the Company.
By Order of the Board of Directors
Keith Jackson
Chairman
EXPLANATORY NOTES
NZX Listing Rules (Listing Rules), Companies Act 1993 (Act), the constitution of the Company
(Constitution) and The Takeovers Code (Code)
The Company is listed on the NZX Main Board and must comply with the Listing Rules and the Code. In
addition, various provisions of the Listing Rules are included in the Constitution. The Act, the Code, the
Constitution and the Listing Rules contain specific requirements which are relevant to the resolutions
comprised in this Notice.
The implications of the Listing Rules, the Act, the Code and the Constitution, insofar as they relate to
each resolution, are addressed in the Explanatory Notes to each resolution.
Nature of Resolutions
The resolutions which are to be considered at the Meeting include 11 ordinary resolutions and two
special resolutions. An ordinary resolution is a resolution passed by a simple majority of votes of
shareholders of the Company, entitled to vote and voting. A special resolution is a resolution passed by
a majority of not less than 75% of votes of shareholders of the Company, entitled to vote and voting.
RESOLUTIONS 1 TO 13
Set out below is further information on the Restructure and the resolutions to be proposed in respect of
the Restructure at this Meeting. Shareholders should also read the Profile, the Independent Adviser’s
Report and Appraisal Report that accompany this Notice of Meeting.
The implementation of resolutions 1 to 12 are conditional upon all of resolutions 1 to 12 being approved
by the shareholders of the Company.
Consequences of Resolutions 1 to 12 not being approved
In the event that all of resolutions 1 to 12 are not approved, then:
• the Restructure will not proceed; and
• the Directors consider that the prospects for the Company are uncertain. The Directors believe that
in the event that resolutions 1 to 12 are not approved, the Directors would need to expeditiously
explore the acquisition of other business initiatives, which opportunities may be limited having
regard to the Company’s limited financial resources, or to seek shareholder approval to put the
Company into liquidation.
RESTRUCTURE HIGHLIGHTS
Summary
The principal terms of the Restructure are as follows:
• The Restructure involves ACE acquiring 100% ownership of the companies within the Being AI group
of companies (Being AI Group).
• The Being AI Group comprises the following enterprises:
Being Consultants Limited
Being Consultants is an early-stage AI/EaT (“exponentially accelerating technologies”) consultancy
business. Being Consultants partners with enterprises to strategically implement AI solutions that
digitally transform business operations focused on increased automation, improved decision
making, enhanced customer experiences and create new intelligent products, ultimately driving
higher revenue growth and margins through optimised workflows across the organisation.
Being Consultants operates on a consultancy and service delivery model. Their revenue will be
generated primarily through consultancy fees charged to client enterprises for implementing AI
solutions. The model is structured around project-based engagements where Being Consultants
offers expertise in AI and EAT to enhance clients' business processes. This includes conducting
assessments, developing strategies, and implementing AI-driven solutions. The business model is
scalable and adaptable, catering to a range of industries and focusing on long-term partnerships
that evolve with clients' growing AI needs. The consultancy also aims to develop proprietary AI tools
and methodologies that can be licensed to clients, providing an additional revenue stream.
Being Consultants is in the early stages of establishing the services noted above with the use of
loans from key stakeholders and third parties.
Being Labs Limited
Being Labs has been recently established and will serve as the research and development engine to
advance AI technologies. Being Labs has no borrowings and has not commenced trading, meaning
it is pre-revenue.
Being Labs will experiment with inventive applications of machine learning, neural networks and
quantum computing to pioneer new AI prototypes and products. Being Labs intends to incubate
solutions and later commercialise these into client offerings or new ventures.
The model will rely on continuous innovation and collaboration with external partners, such as
academic institutions, for research and development funding. Being Labs may also receive grants or
participate in joint ventures for specific research projects. Another potential revenue stream is
through patents and intellectual property rights associated with the AI technologies developed by
the lab.
Being Ventures Limited
Being Ventures has been recently established and will focus on venture investment and
transformation acceleration. Being Ventures has no borrowings and has not commenced trading,
meaning it is pre-revenue.
Being Ventures will identify early-stage AI, Web3 and Advanced Technology startups pioneering
disruptive solutions and provides the capital, scaling support and operations overhaul to lead
thriving portfolio companies. Being Ventures also intends to acquire traditional companies to
implement cutting-edge EaT capabilities that turn businesses into agile industry leaders.
Being Ventures will also acquire traditional companies and enhances their value through the
integration of EAT capabilities. Revenue is generated through the increased profitability and
eventual sale or public listing of these transformed entities.
Send Global Limited
Send Global specialises in physical distribution, both domestic and international, including specialist
file management solutions. Send Global’s business units provide specific industry expertise and
services, to corporates, government departments and small and medium sized businesses across
New Zealand.
Send Global’s service offering and capabilities stretch across domestic and International markets,
covering business mail distribution, data and mail preparation services (both physical and digital),
fulfilment, courier and logistics, offsite facilities management, and unique and bespoke filing
solutions.
Send Global’s growth path is focused on expanding its footprint in digital cloud-based filing
solutions , courier, freight, logistics (3PL), and transport sectors both here and in Australia.
The audited results of Send Global for the financial year ended 31 March 2023 comprise revenues of
$41.8 million, and normalised EBITDA of $2.8 million
2
. For the 6-month period ended 30 September
2023, unaudited normalised EBITDA was $1.5 million.
It should be noted that existing debt within Send Global which is currently provided by Wilshire
Treasury (a related party of 2061) will be refinanced directly with ANZ Bank on completion of the
Reverse Listing.
AGE
AGE operates an innovative school on the North Shore of Auckland for children from years 1 to 13,
that has been operating since 2018. The school currently has 17 staff (11 full-time and 6 part-time)
and has a school roll of approximately 100 students, which is considered potentially sub-scale.
AGE School provides a personalised approach to education. In particular, AGE School’s small
classroom size and teacher to pupil ratio means it can offer personalised learning based on
each child’s interests and a high level of support to help them excel and thrive. AGE School has
a broad curriculum designed to equip children with real world skills beyond those taught in
traditional curriculums.
AGE School’s learning coaches (teachers) team up with innovators and businesspeople,
including David McDonald and Evan Christian, to mentor students on projects that stretch
them well beyond the four walls of a classroom. This helps students understand how important
technology, entrepreneurial thinking, and creativity are in the world they’re growing up in and
gives their learning that much more meaning.
The audited results of AGE for the financial year ended 31 December 2023 comprise revenues
of $3.7 million, and normalised EBITDA of $0.53 million. For the 6-month period ended 30
December 2023, unaudited normalised EBITDA was $0.29 million.
It should be noted that existing debt within AGE which is currently provided by Wilshire Treasury
(a related party of 2061) will be refinanced directly with ANZ Bank on completion of the Reverse
Listing.
AGE is in the course of expanding its online teaching platform and is exploring the opportunities
provided through upcoming reforms to the Education Act 1989 as provided for in the Coalition
Agreement between the National Party and the Act New Zealand.
• The purchase price payable by ACE to acquire the Being AI Group is initially $45 million and may
increase by up to an additional $35 million, which would bring the total purchase price payable to
$80 million.
• The initial purchase price payable of $45 million comprises of:
- $25 million to acquire the shares in Send Global Limited;
- $15 million to acquire the shares in AGE Limited; and
- $5 million to acquire the shares in Being Consultants Limited, which in turn owns Being Labs
Limited and Being Ventures Limited.
2
The $2.8 million normalised EBITDA for the year ended 31 March 2023 excludes exceptional and non-underlying items (G3
Medical close down costs ($233,000)), prior year costs expensed in the 2023 financial year ($154,000), subvention payments
to associated entities that are not part of Being AI Limited ($2.1 million), and a capital gain on the sale of Send Global’s
property in Avondale, Auckland ($1.1 million).
• It is proposed that ACE will satisfy the payment of the initial purchase price of $45 million by issuing
1,800,000,000 ACE shares, at an issue price of $0.025 per share (Consideration Shares), to the
vendors or their nominees of the Being AI Group of Companies in aggregate;
• The additional purchase payable of up to $35 million comprises of an increase in the purchase price
to acquire the shares in Being Consultants Limited, which in turn owns Being Labs Limited and Being
Ventures Limited.
• It is proposed that ACE will satisfy the payment of the additional purchase price payable of up to
$35 million by issuing up to a further 1,399,992,000 ACE shares, at an issue price of not less than
$0.025 per share to the shareholders of Being Consultants Limited (Earn-In Shares), should certain
share price milestones be achieved (“Earn-In Mechanism”). Details of the Earn-In Mechanism and
the additional purchase price payable of up to $35 million are provided in the Explanatory Notes to
resolution 3.
• The Restructure (not including the issue of the Earn-In Shares) implies an initial approximate $1.7
million value of ACE prior to the completion, comprising the “premium value” of ACE as a listed
company, together with its anticipated level of debt as at completion.
• In conjunction with the completion of the purchase of the Being AI Group, ACE will:
- capitalise $768,000 of the debt owed by the Company to Excalibur Capital Partners Limited
(“Excalibur”) by issuing Excalibur with 30,720,000 new ACE shares at an issue price of $0.025
per share (Excalibur Shares); and
- capitalise up to $395,000 of the debt owed by the Company to the four existing directors of the
Company and one former director of the Company for accrued but unpaid directors’ fees by
issuing the four existing directors and one former director with 15,800,000 new ACE shares at
an issue price of $0.025 per share (Directors’ Fee Shares).
• In conjunction with completion of the purchase of Being AI Group, ACE may undertake a capital
raise of up to a further 120,000,000 new ACE shares, at an issue price of not less than $0.025 per
share (Capital Raise Shares), and apply that new capital towards funding the ongoing working
capital and future growth capital requirements of the Being AI Group. Implementation of the
Restructure is not conditional on this capital being raised.
• On completion of the Restructure, Keith Jackson, John Cilliers will resign and be replaced by three
new directors nominated by the vendors of the Being AI Group. Existing directors, Sean Joyce and
Roger Gower, have agreed to continue as directors after the Restructure, and Sean Joyce will be
appointed as Chair of the Company.
• The Restructure is subject to a number of conditions, primarily comprising the approval by ACE
shareholders of the resolutions being tabled at this meeting.
What ACE will look like post completion of the Restructure
Following completion of the Restructure, ACE will:
• Own 100% of the Being AI Group. The future performance of ACE and the ACE shares will therefore
be entirely dependent upon the future performance of the business operations of the Being AI
Group following completion of the Restructure.
• Have a total of 1,868,018,828 shares on issue, after the issue of the Consideration Shares, the
Excalibur Shares, and the Directors’ Fee Shares, and a total of 1,988,018,828 shares on issue if
the Capital Raise Shares are issued.
• The issue of the Consideration Shares, the Excalibur Shares, the Capital Raise Shares and the
Directors’ Fee Shares will have the following effect on existing ACE shareholders:
Current shares on issue
21,498,828
Consideration Shares to be issued
1,800,000,000
Excalibur Shares to be issued
30,720,000
Directors’ Fee Shares
15,800,000
Total shares on issue after the completion of the Restructure
but before the Capital Raise
1,868,018,828
Percentage of overall dilution after the Completion of the
Restructure but before the Capital Raise
98.85%
Total shares on issue after the completion of the Restructure
but before any Capital Raise
1,868,018,828
Maximum Capital Raise Shares to be issued
120,000,000
Total shares on issue after the completion of the Restructure
and Capital Raise
1,988,018,828
Percentage of overall dilution after the Restructure and
maximum size Capital Raise
98.92%
Example shareholder: pre-Restructure percentage holding
10.00%
Example shareholder: post Restructure (including Capital Raise)
percentage holding
0.11%
• The Board of ACE will comprise Sean Joyce, David McDonald, Katherine Allsopp-Smith, Joe Jensen and
Roger Gower. Evan Christian will be Katherine Allsopp-Smith’s alternate director (and will be entitled
to attend a board meeting in her place if she is not able to attend a board meeting).
Further details of the Restructure are set out in the Explanatory Notes to Resolutions 1 to 12 of this
Notice of Meeting and in the Independent Adviser’s Report and Appraisal Report that accompanies this
Notice of Meeting.
15% placement capacity
Under Listing Rule 4.5, the Company is permitted to issue up to 15% of the shares on issue in the
previous 12 months plus any shares issued with shareholder approval otherwise permitted to be issued
under the Listing Rules. The total number of shares to be on issue immediately after completion of the
Reverse Listing (being those held in the last 12 months or to be issued with approved by shareholders) is
1,868,018,828 shares.
The Company is seeking authority to issue the Capital Raise Shares and Post Completion Shares after
completion under resolution 4 and resolution 12. If issued, the allotment of these shares will also
increase the 15% capacity by 15%. The effect of resolution 4 and resolution 12, with Listing Rule 4.5, is
that the Company will have the ability to undertake larger placement capital raises than the normal 15%
limit under the Listing Rules.
In addition to the authority sought to issue the Capital Raise Shares and Post Completion Shares under
resolution 4 and resolution 12, the Company could, in theory, issue approximately a further 340,202,824
shares under the Rule 4.5 (being 1,582% of the 21,498,828 shares currently on issue and 13% of the
2,608,221,652 shares that would be on issue if all 340,202,824 shares were issued). This calculation
includes Capital Raise Shares and Post Completion Shares but excludes Earn-In Shares for the purposes
of calculating 15%.
While Listing Rule 4.5 contains permission to issue shares without shareholder approval of up to the
15% capacity limit, as at the date of this Notice the Company has no present intention to issue further
shares under Listing Rule 4.5 but reserves a right to do so.
Takeovers Code association considerations
For the purposes of the Code, all of the Vendors have been treated as if they were collectively associates
(as that term is defined in the Code) given they are acting in concert as parties to the Sale Agreement.
Furthermore, the Vendors and Excalibur have been treated as if they were collectively associates (as
that term is defined in the Code) given the agreement by the Vendors to issue part of the Consideration
Shares to Excalibur.
However, following completion of the Reverse Listing Transaction, in the Company’s view, the Vendors
(including the Vendors themselves) and Excalibur should not be regarded as associates of each other
because they will no longer be acting in concert in relation to the Reverse Listing Transaction. The
Vendors and Excalibur have confirmed that they do not and will not have any agreements or
understandings in place regarding how they should each vote their respective shareholdings that they
hold in the Company, and therefore each is free to decide how they may vote their shares in the
Company independently of the others.
Timetable
The timetable for the Restructure is anticipated to be as follows:
Event Date
Special Meeting of Shareholders to be held
10am on 28 March 2024
Issue of Consideration Shares, Excalibur
Shares, Capital Raise Shares and Directors’
Fees Shares, change of name of ACE,
restructure of the ACE Board of Directors
(Completion Date)
by 5pm on 28 March 2024
Lifting of suspension of trading in ACE shares
by 5pm on 28 March 2024
Name change and listing code effective on
NZX
2 April 2024
In the event that ACE shareholders do not approve the Restructure, ACE would apply to NZX for the
suspension of the trading in shares in ACE to be lifted following the date of the Special Meeting.
RESOLUTION 1: ACQUISITION OF 100% OF THE SHARES ON ISSUE IN THE BEING AI GROUP OF
COMPANIES (“BEING AI GROUP”) – SPECIAL RESOLUTION – LISTING RULES 5.1.1 AND 5.2.1, AND
SECTION 129 OF THE COMPANIES ACT 1993
GENERAL
The Company has entered into a Reverse Listing Agreement (Sale Agreement) with the shareholders of
Being Consultants Limited, AGE Limited and Send Global Limited (Vendors) to acquire 100% of the
shares on issue in those companies, and their respective subsidiary companies (Being AI Group) for an
initial purchase price of $45 million (comprising $25 million to purchase the shares in Send Global
Limited, $15 million to purchase the shares in AGE Limited, and $5 million to purchase the shares in
Being Consultants Limited), and up to a total purchase price $80 million. (Reverse Listing Transaction).
The initial purchase price of $45 million will be satisfied by the issue of 1,800,000,000 ACE shares, at an
issue price of $0.025 per share (Consideration Shares), to the Vendors.
The additional purchase price payable of up to $35 million (bringing the total purchase price payable up
to a total of $80 million) will be satisfied by the issue of up to a further maximum 1,399,992,000
additional shares in ACE at an issue price of not less than $0.025 per share should certain share price
milestones for the ACE shares be met in the future, pursuant to an “earn-in” mechanism (Earn-In
Shares). Details of the earn-in mechanism are provided in the Explanatory Notes to resolution 3.
Following the completion of the Reverse Listing Transaction, the Being AI Group will become wholly
owned subsidiaries of the Company.
The principal business operations of Being AI Group are described on pages 10 to 12 of this Notice.
The Profile provides the following additional information in respect of the Being AI Group and the
Company post completion of the Reverse Listing Transaction and collateral capital raising initiatives:
• The organisational and operational structure of the Company – refer to section 3 of the Profile;
• The proposed Board and senior executives of the Company – refer to section 3 of the Profile;
• Risks associated with the commercial operations of the Company – refer to section 6 of the Profile.
CONDITIONS OF THE SALE AGREEMENT
The acquisition of the Being AI Group is conditional upon the Company obtaining all shareholder
approvals that may be required to undertake the Reverse Listing Transaction and the transactions
associated with the Reverse Listing Transaction as detailed in this Notice of Meeting, including but not
limited to, those approvals required in accordance with the Companies Act, the Code and the Listing
Rules.
In addition, the settlement of the transaction is conditional on satisfaction of the conditions in the Sale
Agreement, which are noted in full in section 4.2.2 of the Independent Adviser’s Report and Appraisal
Report. Notable conditions include:
• the shareholders of the Company approving resolutions 1 to 12 at the Special Meeting; and
• the Company obtaining all approvals required from NZX and the Takeovers Panel; and
• the Company obtaining consent to the proposed transfer of the Being AI Group from each general
security holder, landlord and counterparty to each material contract entered into by the Being AI
Group.
The date for satisfaction, or waiver, of all conditions is no later than 31 March 2024.
Following the completion of the Reverse Listing Transaction and Restructure, the Company will change
its name to “Being AI Limited” and its NZX ticker code to “BAI”.
Related Party Transaction
After the entry of the Company into the Sale Agreement, 2061 LP, an entity co-owned by Evan Christian
and Katherine Allsopp-Smith, and the then sole shareholder of AGE Limited and Send Global Limited,
agreed to sell Sean Joyce, a director of the Company, 133 shares in AGE Limited (AGE Shares). The sale
of the AGE shares was funded by Send Global Limited lending Sean the sum of $2 million, which sum
was in turn paid to 2061 LP on account of the satisfaction of the payment of the purchase price.
As a consequence of this arrangement, Sean will be entitled to receive 80,000,000 of the Consideration
Shares by virtue of becoming a beneficial holder of shares in AGE Limited prior to the date of the
completion of the Restructure.
REQUIREMENT FOR RESOLUTION
The entry into the Sale Agreement, and the proposed acquisition of the Being AI Group, must be
approved by shareholders. Shareholder approval is required in respect of resolution 1 for the following
reasons:
Major Transaction
• The value of the Being AI Group is greater than half the value of the Company’s assets, making
this a “major transaction” for the purposes of section 129 of the Companies Act. Section 129 of
the Companies Act requires that a major transaction must be approved by a special resolution
of shareholders present in person or proxy and able to vote at the meeting.
A special resolution of shareholders means a resolution of shareholders approved by a majority
of 75% of the votes of those shareholders entitled to vote and voting on the question.
Change in the essential nature of the Company’s business – Listing Rule 5.1.1(a)
• Under the proposed restructure of the Company’s commercial and capital operations, the
Company will be entering into a transaction which will change the essential nature of the
Company’s business. Currently the Company is a non-active listed company which does not
undertake any trading activities. Should the Restructure proceed, the Company will own 100%
of the Being AI Group and will ultimately own and control the operations of the Being AI Group.
Listing Rule 5.1.1(a) requires that in the event that a Company proposes to change the essential
nature of its business, any such change must be approved by an ordinary resolution of
shareholders.
An ordinary resolution of shareholders means a resolution passed by a simple majority of votes
of those shareholders entitled to vote and voting on the question.
Acquisition of Assets with a Gross Value above 50% of the Average Market Capitalisation of
ACE – Listing Rule 5.1.1(b)
• Listing Rule 5.1.1(b) requires that in the event that ACE proposes to acquire assets with a gross
value above 50% of the Average Market Capitalisation of ACE (as that term is defined in the
Listing Rules), then that transaction must be approved by an ordinary resolution of
shareholders, or a special resolution if approved by way of a special resolution is required
under section 129 of the Companies Act. Given the value of the Being AI Shares exceeds this
threshold, Listing Rule 5.1.1(b) requires approval by way of special resolution under section 129
of the Companies Act (as set out above).
A special resolution of shareholders means a resolution of shareholders approved by a majority
of 75% of the votes of those shareholders entitled to vote and voting on the question.
Potential buyback of shares from vendors under a warranty claim – Listing Rule 4.14.1
• Listing Rule 14.14.1 allows the Company to buyback and cancel the shares if approved by
ordinary resolution of shareholders. In the unlikely event the Company makes a warranty claim
under the sale agreement, the relevant Vendor may elect to sell and have cancelled shares to
the Company to satisfy the warranty claim at the greater of:
(a) $0.025 cents per share; and
(b) the volume weighted average price of the Company’s shares traded on the NZX Main
Board in the 20 business days prior to the date of cancellation.
Transactions with Related Parties – Listing Rule 5.2
• Listing Rule 5.2.1 requires that in the event that ACE wishes to enter into a Material Transaction
(the purchase of the Being AI Group) and a Related Party, i.e., a director of ACE (Sean Joyce) is a
direct party to the material Transaction, then that Material Transaction must be approved by
an ordinary resolution of shareholders.
An ordinary resolution of shareholders means a resolution passed by a simple majority of votes
of those shareholders entitled to vote and voting on the question.
APPRAISAL REPORT
Listing Rule 7.8.8(b) requires an Appraisal Report to be prepared where a meeting of shareholders will
consider a resolution required by Listing Rule 5.2.1 (as is the case with the proposed acquisition of the
Being AI Group to which Sean Joyce/Excalibur Capital Partners Limited is a party).
The Appraisal Report is incorporated in the Independent Adviser’s Report and Appraisal Report that
accompanies this Notice. Armillary Limited has prepared the Independent Adviser’s Report and
Appraisal Report. The appointment of Armillary Limited was approved by NZX Limited.
THE VALUATION METHODOLOGY UTILISED BY THE BOARD
The Company negotiated the total purchase price for 100% of the shares in the Being AI Group on a
commercial arms-length basis with the Vendors.
• Purchase of BCL: the initial purchase price for 100% of the shares in BCL is $5 million and may increase
by a further $35 million in the future should certain share price milestones for the Company’s share
price be achieved pursuant to an Earn-In Mechanism (refer to page 22 of the Listing Profile for further
details). This would increase the total consideration payable for the Being AI Group to up to $80
million. The earn-in mechanism was developed to reward the Vendor of BCL for the increase in share
value of the Company that would largely be attributable to their performance post completion of the
transaction. The total $40 million purchase price for 100% of the share in BCL is based on the Board’s
evaluation of the expertise and personnel assembled by BCL, and BCL’s potential to generate revenue
and capital growth from developing its proprietary technology and investing in technology-focused
business opportunities.
• Purchase of SGL: the $25 million purchase price for 100% of the shares in SGL was based on the
Board’s evaluation of SGL’s financial performance over time and position in the market (SGL
operates in an oligopoly), SGL’s potential to generate revenue in the future, gross margins, brand
strength and future growth potential.
• Purchase of AGE: the $15 million purchase price for 100% of the shares in AGE was based on the
Board’s evaluation of the current financial performance of AGE, the cost to expand AGE School’s
existing facilities, regulatory compliance, AGE’s potential to generate revenue in the future, gross
margins, brand strength and growth potential via expansion of the existing school footprint, and
ability to leverage into complementary educational verticals.
The Company’s Board is very comfortable with this valuation methodology having regard to the
following factors:
• The body of the Being AI Group assets, namely the Send Global business, is an established business
with a significant trading history.
• The revenues and earnings for Send Global are steady.
• The business sectors in which Send Global and AGE School operates are relatively stable and non-
volatile.
• The Board considers that Send Global and AGE School have a great deal of opportunity to continue
to grow both organically and via acquisitions in the future.
• Send Global has an experienced executive team well entrenched in the logistics and parcels sector.
• AGE School has an experienced executive team.
• Being Consultants Limited has an executive team with significant intellectual capital to advance the
Being Consultants Limited, Being Labs and Being Ventures initiatives.
• The growth and investment opportunities for Being Consultants, Being Ventures and Being Labs
represent a genuinely exciting opportunity for the Company post restructure given the dynamic
nature of the AI and technology sectors.
• The earn-in shares will only be earned by the vendor of the shares in BCL in the event that the share
price for the Company appreciates significantly post completion of the transaction, in which case all
the shareholders of the Company will also have benefited from a significant appreciation in the
Company’s share value.
Further information about the valuation of the Being AI Group is provided in sections 7, 8 and 9 (pages
45 to 63) of the Independent Adviser’s Report and Appraisal Report that accompanies this Notice of
Meeting.
KEY CONSIDERATIONS RELEVANT TO YOUR VOTE
Recommendation of the Board
The Board strongly recommends that all shareholders review the Profile and the Independent Adviser’s
Report and Appraisal Report that accompany this Notice of Meeting in order to fully appreciate the
nature of the prospective Restructure and the Reverse Listing Transaction.
The Board recommends that ACE shareholders vote in favour of the Reverse Listing Transaction and the
Restructure. The reasons for such recommendation are:
• The issue of the Consideration Shares to the Vendors’ will enable the Company to satisfy the
payment of the initial purchase price payable by the Company to the Vendors to acquire the Being
AI Group.
• The Directors believe that the Acquisition of the Being AI Group should have materially positive
benefits for the Company for reasons detailed above under the heading “The Valuation
Methodology Utilised by the Board”.
• The Directors consider that the issue price for the Consideration Shares is fair and reasonable to the
Company.
• Having regard to the current cash resources of the Company, the value attributed to the Company
as a listed shell as part of the Restructure, and the business opportunity afforded to the Company
with the Acquisition of the Being AI Group, the Board believes that the proposed Reverse Listing
Transaction and the Restructure presents a credible and exciting opportunity for the Company and
its shareholders. The Board notes that the Company will indirectly be taking on the existing future
indebtedness of the Being AI Group on its balance sheet post the completion of the Reverse Listing
Transaction and Restructure. On completion, the group will have cash and lines of credit in excess
of $5 million.
• The addition reasons detailed above under the heading “The Valuation Methodology Utilised by the
Board”.
The ACE Board supports fully the Reverse Listing Transaction and the Restructure and recommends
that shareholders support the resolutions being tabled at the Special Meeting to approve the Reverse
Listing Transaction and the Restructure.
Your vote is important
For the Restructure to proceed, it is necessary that ACE shareholders approve both the acquisition of
the Being AI Group, the restructure of the ACE Board, and the capital raising initiatives. The acquisition
of the Being AI Group requires the approval of a special (75%) resolution. The restructure of the ACE
Board and the issue of the Consideration Shares, the Capital Raise Shares, the Excalibur Shares, the
Directors’ Fee Shares, and the Post Completion Shares requires the approval of an ordinary (50%)
resolution, subject to the voting restrictions detailed in this Notice.
Reasons to vote in favour of the Reverse Listing Transaction, the acquisition of the Being AI Group and
the Restructure
ACE has very limited alternative options available to it
ACE has no cash reserves and is fully reliant on Sean Joyce/Excalibur Capital partners Limited continuing
to provide funding to the Company to enable it to meet its compliance obligations.
In the event that a suitable acquisition is not identified and executed, and unless such an acquisition
ultimately generates positive cashflows, ACE will eventually have limited options as a viable going
concern or a suitable candidate for a reverse listing transaction.
The acquisition of the Being AI Group business operations represents an opportunity:
• to acquire several diversified yet complementary businesses with genuine growth potential, the
largest of which is already cashflow positive; and
• to provide the platform for driving future shareholder value through the underlying future
performance of the Being AI Group business operations.
Accelerate the growth of the Being AI Group
Utilising the existing cash resources of Being AI Group, together with the new capital to be raised
through a placement to investors, will assist to fund the growth and expansion plans of the Being AI
Group business.
Potential to generate increased shareholder value
Should the new Board of ACE (post completion of the Restructure), together with the executives of the
Being AI Group, be able to effectively implement their business strategy to grow the Being AI Group
business operations, then that performance may lead to an appreciation in the underlying ACE share
price, and in doing so increase shareholder value.
If the Restructure proceeds, and shareholders are dissatisfied with the outcome of the Restructure,
they will have an opportunity to sell their shares in ACE (subject to a liquid trading market developing)
It is the Board’s view that it is likely that there will be more trading liquidity in ACE’s shares on the NZX
should the Restructure proceed, than if the Restructure does not proceed.
In the event that the Restructure proceeds and existing ACE shareholders do not wish to continue to
hold their ACE shares, or are dissatisfied with the progress that the Being AI Group business is making,
then ACE shareholders will have the opportunity to sell their ACE shares on market (post completion of
the Restructure), subject to liquidity in ACE’s shares at that time.
Other considerations relevant to the Reverse Listing Transaction and the Restructure
While the Board expects that the Reverse Listing Transaction and the Restructure will deliver positive
value for existing ACE shareholders, and the Board has recommended that ACE shareholders vote in
favour of the Reverse Listing Transaction and the Restructure, shareholders should also consider the
following factors relating to the Reverse Listing Transaction and the Restructure and the potential
impact on ACE and its shareholders:
You may believe that the consideration payable to acquire the Being AI Group is too high
The price payable by ACE to acquire the Being AI Group is initially $45 million and may increase up to a
total of $80 million if all of the Earn-In Shares are issued. You may consider that the total purchase price
is too high having regard to the current operational performance of the business operations of the Being
AI Group.
You may consider the dilutionary impact of the issue of the Consideration Shares, the Directors Fee
Shares, the Excalibur Shares, the Capital Raise Shares and the Earn-In Shares is too significant
The dilutionary impact of the issue of the new shares in the Company to be issued as part of the
Restructure (comprising the Consideration Shares, the Capital Raise Shares, the Directors’ Fee Shares,
and the Excalibur Shares) is 98.92%, and would be 99.38% if the Earn-In Shares are also issued. You may
consider that the dilutionary impact of embarking on the Restructure is too significant in the context of
the Restructure as a whole.
You may consider that the Reverse Listing Transaction and the Restructure are not in your best
interests
There may be other reasons, particular to you, why you consider that the Reverse Listing Transaction
and the Restructure are not in your best interests.
You may consider that there is a possibility that a superior transaction could emerge
The Board has no basis to believe that an alternative acquisition or restructuring proposal will be
received given that ACE has not received any approaches since the announcement of the Reverse Listing
Transaction and the Restructure on 11 December 2023.
The Board believes that the acquisition of the Being AI Group is the right business opportunity to invest
in to generate increased shareholder value.
KEY RISKS
The Board and the Vendors of the Being AI Group have identified a number of risk factors associated
with the Being AI Group’s business which may affect the Company’s future operating performance and
financial position and the value of the Company’s shares post completion of the Reverse Listing
Transaction and Restructure.
The principal risk factors are detailed in section 6 of the Profile.
BUY-OUT RIGHT
In respect of those shareholders who vote against Resolution 1, section 110 of the Companies Act gives
those shareholders certain rights to require the Company to purchase their shares in the Company, if
Resolution 1 is approved. Any shareholder who casts all votes attached to the shares registered in their
name (and having the same beneficial owner) against Resolution 1 is entitled to require the Company to
purchase their shares.
The right to have shares purchased must be exercised within 10 Business Days of the passing of
Resolution 1 by the dissenting shareholder by giving written notice to the Company. The mechanics and
the procedure for such an acquisition are provided in Appendix 3 to this Notice of Meeting.
INDEPENDENT REPORT
The NZX Guidance Note – Backdoor and Reverse Listing Transactions (Guidance Note) requires the
Company to obtain an Independent Report in respect of the proposed Reverse Listing Transaction and
Restructure. Armillary Limited has prepared the Independent Advisers Report and Appraisal Report, and
a copy of it accompanies this Notice of Meeting. The appointment of Armillary Limited was approved by
NZX Limited. The Independent Adviser’s Report and Appraisal Report has also been prepared to comply
with the requirements of the Takeovers Code, the requirements of which are addressed in the
explanatory notes to Resolution 2.
VOTING RESTRICTIONS
The Vendors, and their Associated Persons (as that term is defined in the Listing Rules) are prohibited
from voting on Resolution 1.
RESOLUTION 2: ISSUE OF 1,800,000,000 ORDINARY FULLY PAID SHARES TO THE SHAREHOLDERS OF
THE COMPANIES WITHIN THE BEING AI GROUP – ORDINARY RESOLUTION – LISTING RULES 4.1.1 AND
5.2.1, AND RULE 7(d) OF THE TAKEOVERS CODE
GENERAL
The initial purchase price for the acquisition of 100% of the shares in the Being AI Group will be satisfied
by the issue of 1,800,000,000 fully paid ordinary shares in the Company (Consideration Shares) to the
following shareholders of the companies within the Being AI Group (Vendors) or the Vendor’s nominee
in the following amounts:
Name of Vendor Number of new
Consideration shares to be
issued
2061 LP
Controller: Evan Christian and Katherine Allsopp-Smith
1,270,000,000
Te Turanga Ukaipo Charitable Trust (Te Turanga Ukaipo)
Controller: Evan Christian and Katherine Allsopp-Smith
250,000,000
2384 LP
Controller: David McDonald
200,000,000
Excalibur Capital Partners Limited
Controller: Sean Joyce
80,000,000
The Consideration Shares will each have an issue price of $0.025 per share. If Resolutions 1 to 12 are
approved, the chronology of the share issues in respect of the completion of the Reverse Takeover and
the Restructure are as follows:
• 200,000,000 of the Consideration Shares will be issued to 2384 LP;
• Up to 120,000,000 Capital Raise Shares may be issued to the investors in the placement;
• 15,800,000 Directors’ Fee Shares will be issued to the four directors’;
• 30,720,000 Excalibur Shares will be issued to Excalibur Capital Partners Limited;
• 80,000,000 of the Consideration Shares will be issued to Excalibur Capital Partners Limited; and
• 1,270,000,000 of the Consideration Shares will be issued to 2061 LP and 250,000,000 of the
Consideration Shares will be issued to 2061 LP’s nominee, Te Turanga Ukaipo.
The Vendors are expected to hold or control 91.30% of the total number of voting securities on issue in
the Company in aggregate immediately following the completion of the Reverse Listing Transaction and
the Restructure (including the issue of the Capital Raise Shares).
Capital structure post completion of the Reverse Listing Transaction - the Acquisition, the issue of the
Consideration Shares, the Directors’ Fee Shares, the Excalibur Shares and the issue of the Capital Raise
Shares
Details of the capital structure and shareholding profile of the Company post completion of the Reverse
Listing Transaction, the issue of the Consideration Shares, the Directors’ Fee Shares, the Excalibur
Shares, and the issue of the Capital Raise Shares are provided in the Table below:
Nature of Shares on issue, or to
be issued
Ordinary Shares % of Total Share
Capital following
Restructure
(excluding Capital
Raise Shares)
% of Total Share
Capital following
Restructure
(including Capital
Raise Shares)
Current shares on issue
21,498,828 1.15% 1.08%
Consideration Shares to be
issued
1,800,000,000 96.35% 90.54%
Directors’ Fee Shares to be
issued
15,800,000 0.85% 0.79%
Excalibur Shares to be issued
30,720,000 1.64% 1.55%
Capital Raise Shares to be issued
120,000,000 n/a 6.04%
Total
1,988,018,828
100.00% 100.00%
Dilutionary Impact
Following the issue of the Consideration Shares to the Vendors, and the issue of the Directors’ Fee
Shares and the Excalibur Shares, the Vendors will hold 97.20% of the shares on issue in the Company. In
addition, the Vendors will hold 91.30% of the shares on issue in the Company if the maximum number of
Capital Raise Shares are issued.
Full particulars of the Vendors, the beneficial owners of the Consideration Shares, and their respective
allocations of Consideration Shares are detailed in part 2 of Appendix 1 of this Notice.
ISSUE PRICE
The Board believes that the issue price of $0.025 for each of the Consideration Shares represents fair
value to the Company taking into account the following:
• the issue price for the Consideration Shares was negotiated between the ACE Board and the
Vendors on a commercial arm’s length basis; and
• with an anticipated capital base of 21,498,828 shares on issue in the Company as at the date of the
completion of the Reverse Listing Transaction, and immediately prior to the issue of the
Consideration Shares, the issue price of $0.025 effectively values the Company at approximately
$537,000 (ignoring the face value of the indebtedness that the Company is carrying), which, in the
Board’s opinion represents, a fair valuation of the Company as a listed vehicle having regard to the
Company’s current financial position and prospects, and the intangible value of the Company as a
“listed shell”.
REQUIREMENT FOR RESOLUTION
NZX Listing Rules Requirements
Listing Rule 4.1.1 requires that the issue of the Consideration Shares be approved by an ordinary
resolution of the existing shareholders of the Company.
Listing Rule 5.2.1 requires that in the event that ACE wishes to enter into a Material Transaction (the
issue of the Consideration Shares) with a Related Party, i.e., Sean Joyce/Excalibur Capital Partners
Limited, then that Material Transaction must be approved by an ordinary resolution of shareholders.
Appraisal Report
Listing Rule 7.8.8(b) requires an Appraisal Report to be prepared where a meeting of shareholders will
consider a resolution required by Listing Rule 5.2.1 (as is the case with the proposed issue of new ACE
Shares to Excalibur Capital Partners Limited).
The Appraisal Report is incorporated in the Independent Adviser’s Report and Appraisal Report that
accompanies this Notice. Armillary Limited has prepared the Independent Adviser’s Report and
Appraisal Report. The appointment of Armillary Limited was approved by NZX Limited.
VOTING RESTRICTIONS
The Vendors and their nominees (including Te Turanga Ukaipo and Excaliabur Capital Partners Limited)
and their respective Associates (as that terms is defined in the Takeovers Code) or their Associated
Persons (as that term is defined in the Listing Rules) are prohibited from voting on Resolution 2.
Takeovers Code (Code) Requirements
In addition, the issue of the Consideration Shares is required to be approved in accordance with the
Code. Under Rule 6 of the Code, a person who holds or controls:
• no voting rights, or less than 20% of the voting rights in a code company may not become the
holder or controller of an increased percentage of the voting rights in the code company unless,
after that event, that person and the person's associates hold or control not more than 20% of the
voting rights in the code company; or
• 20% or more of the voting rights in a code company may not become a holder or controller of an
increased percentage of the voting rights in the code company.
There are a number of exceptions to this rule. These include the exception under rule 7(d) of the Code,
where a person may become the holder or controller of an increased percentage of voting rights in a
code company by an allotment of voting securities in the code company if the allotment has been
approved by an ordinary resolution of the code company in accordance with the Code.
The Company is a code company. In accordance with Rule 7(d) of the Code, the allotment of the
Consideration Shares to the Vendors is required to be approved by an ordinary resolution as an
exception to Rule 6 of the Code.
The Code requires the Company to obtain an Independent Adviser’s Report. The purpose of the
Independent Adviser’s Report is to assess the merits of the proposed allotment of the Consideration
Shares to the Allottees, having regard to the interests of those persons who may vote to approve the
allotment. Armillary Limited has prepared such a Report and a copy of it accompanies this Notice of
Meeting. The appointment of Armillary Limited was approved by the Takeovers Panel.
The information required under Rule 16 of the Takeovers Code is set out in Appendix 1 of this Notice of
Meeting.
For the purposes of the Code, all of the Vendors have been treated as if they were collectively associates
(as that term is defined in the Code) given they are acting in concert as parties to the Sale Agreement.
However, following completion of the Reverse Listing Transaction, in the Company’s view, the Vendors
should not be regarded as associates of each other because they will no longer be acting in concert in
relation to the Reverse Listing Transaction. The Vendors have confirmed that they do not and will not
have any agreements or understandings in place regarding how they should each vote their respective
shareholdings that they hold in the Company, and therefore each is free to decide how they may vote
their shares in the Company independently of the others.
For the purposes of the Takeovers Code, to the best of ACE’s knowledge the only existing ACE
shareholder that is restricted from voting on resolution 2 by virtue of the Takeovers Code is Excalibur
Capital Partners Limited.
RESOLUTION 3: ISSUE OF UP TO 1,399,992,000 ADDITIONAL ORDINARY FULLY PAID SHARES TO THE
SHAREHOLDERS OF BEING CONSULTANTS LIMITED (“EARN-IN SHARES”) – ORDINARY RESOLUTION –
LISTING RULE 4.1.1 AND RULE 7(D) OF THE TAKEOVERS CODE
GENERAL
The Sale Agreement entered into between the Company and the Vendors provides for an upwards
adjustment to the $5 million initial purchase price payable by the Company to acquire the shares in
Being Consultants Limited (BCL Purchase Price) up to a maximum amount of $40 million (in aggregate).
This increase in the BCL Purchase Price of $35 million is subject to the Company achieving certain share
price milestones post-completion of the Restructure (Completion Date). This would increase the total
purchase price payable for the Being AI Group to up to $80 million. The details of the adjustment in the
BCL Purchase Price are as follows:
• In the event that the Volume Weighted Average Price (VWAP) for ACE Shares for any 90 day period
calculated at a time of 2384 LP’s choosing provided that it is not earlier than nine calendar months
after Completion Date and is above $0.04 and not more than $0.05 per ACE Share, then the BCL
Purchase Price shall be increased by a further $9,333,280 up to a maximum of $11,666,600, and
ACE shall satisfy that increased purchase price by issuing 2384 LP (or its nominees) with a further
373,331,200 ACE Shares up to a maximum of 466,664,000 ACE Shares (calculated on a linear sliding
scale) at an issue price of not less than $0.025 per ACE Share. For the avoidance of doubt, if the
VWAP exceeds $0.05, then the BCL Purchase Price will be increased by $11,666,600 and a further
466,664,000 ACE Shares will be issued.
• In the event that the VWAP for ACE Shares for any 90 day period calculated at a time of 2384 LP’s
choosing provided that it is not earlier than 18 calendar months after Completion Date, exceeds
$0.08, but is not more than $0.10, per ACE Share, then the BCL Purchase Price shall be increased by
a further $9,333,280 up to a maximum of $11,666,600, and ACE shall satisfy that increased
purchase price by issuing 2384 LP(or its nominees) with a further 373,331,200 ACE Shares up to a
maximum of 466,664,000 ACE Shares (calculated on a linear sliding scale) at an issue price of not
less than $0.025 per ACE Share. For the avoidance of doubt, if the VWAP exceeds $0.10, then the
BCL Purchase Price will be increased by $11,666,600 and a further 466,664,000 ACE Shares will be
issued.
• In the event that the VWAP for ACE Shares for any 90 day period calculated at a time of 2384 LP’s
choosing provided that it is not earlier than 24 calendar months, and not later than 36 calendar
months after Completion Date, exceeds $0.12, but is not more than $0.15 per ACE Share, then the
BCL Purchase Price shall be increased by a further $9,333,280 up to a maximum of $11,666,600, and
ACE shall satisfy that increased purchase price by issuing 2384 LP (or its nominees) with a further
373,331,200 ACE Shares up to a maximum of 466,664,000 ACE Shares (calculated on a linear sliding
scale) at an issue price of not less than $0.025 per ACE Share. For the avoidance of doubt, if the
VWAP exceeds $0.15, then the BCL Purchase Price will be increased by $11,666,600 and a further
466,664,000 ACE Shares will be issued.
• In the event that the VWAP for ACE Shares for any 6 month period calculated at a time of 2384 LP’s
choosing provided that it is not later than 36 calendar months after Completion Date, exceeds $0.30
per ACE Share, then the BCL Purchase Price shall be increased by $34,999,800 (less any additional
purchase price already triggered under paragraphs (a),(b) and/or (c) above), and ACE shall satisfy
that increased purchase price by issuing 2384 LP (or its nominees) a further 1,399,992,000 ACE
Shares (less any additional shares already issued under paragraphs (a),(b) and/or (c) above) at an
issue price of not less than $0.025 per ACE Share (a “home run”)).
• Any ACE Shares issued in accordance with the above mechanism shall be issued subject to a trading
restriction such that the recipient of the ACE Shares shall not be entitled to sell, mortgage, or
otherwise deal in those ACE Shares for a period of 12 months from the date of their issue. 2384 LP
shall procure, as a condition of the issue of the ACE Shares under this mechanism, that each
recipient of the ACE Shares enter into a restricted security agreement with ACE, on terms agreeable
to ACE (acting reasonably and consistently with market practice).
In the event that the full entitlement of Earn-in Shares is achieved under this mechanism, then:
• a further 1,399,992,000 ACE Shares would be issued to the vendors of the shares in Being
Consultants Limited;
• assuming all share price milestones were attained, and the earn-in shares were therefore issued;
• the share price for the Company’s shares was $0.15; and
• there were no further shares on issue in the Company other than those contemplated in this Notice,
then the market capitalisation of the Company would be circa $508 million.
Dilutionary Impact
Assuming that:
• the Reverse Listing Transaction has completed;
• the issue of the Consideration Shares, the Directors’ Fee Shares and the Excalibur Shares are
completed, and no Capital Raise Shares are issued;
• the full 1,399,992,000 Earn-In Shares are issued,
2384 LP as recipient of the Earn-In Shares would hold a total of 1,599,992,000 shares (comprising the
Earn-In Shares together with the 200,000,000 Consideration Shares to be issued to 2384 LP under
resolution 2), would hold 48.96% of the shares on issue in the Company, and the shareholding profile of
the Company would be as follows:
Nature of Shares on issue, or to be issued Ordinary Shares
% of Total Share Capital
following Restructure
(excluding Capital Raise
Shares)
Total number of shares on issue prior to
the issue of the Earn-In Shares (of which
2384 LP holds 200,000,000).
1,868,018,828
57.13%
Maximum number of Earn-In Shares that
can be issued
1,399,992,000 42.87%
Total
3,268,010,828 100%
Takeovers Code implications
In addition to the potential receipt of 1,399,992,000 Earn-In Shares, 2384 LP is to also be allotted
200,000,000 Consideration Shares (as delineated in Resolution 2). For the reasons detailed in the
explanatory notes to resolution 2 under the heading “Requirement for Resolution”, the provisions of the
Takeovers Code are also applicable to this resolution given 2384 LP would potentially hold more than
20% of the total number of voting securities on issue in the Company in aggregate should a significant
portion of the Earn-In Shares be ultimately issued to 2384 LP in accordance with the Earn-In mechanism,
and potentially as much as 48.96% of the total issued share capital of the Company, assuming the
Capital Raise Shares are not issued.
3
3
This percentage has been calculated to include the 200,000,000 Consideration Shares to be issued to 2384 LP.
Waiver of Listing Rule 4.2.2
Under Listing Rule 4.2.2, shares must be issued within 12 months of shareholder approval. The Company
has sought a waiver from NZ RegCo of this timeframe in respect of the issue of the Earn-In Shares and
NZ RegCo has indicated it is minded to grant the waiver on the following conditions:
1. The proposed directors of the Company not interested in resolution 3 (being Katherine Allsopp-
Smith, Sean Joyce, Joe Jensen and Roger Gower) certifying to NZ RegCo, that in the opinion of each
of the proposed non-interested directors, the issue of the Earn-In Shares is in the best interests of,
and is fair and reasonable to, the Company and all shareholders not associated with the issue of the
Earn-In Shares.
2. The Company certifying to NZ RegCo that the Earn-In Shares will be issued no later than 36 months
after the passing of resolution 3.
The Company anticipates being formally granted the waiver before completion of the Reverse Listing.
REQUIREMENT FOR RESOLUTION
Listing Rule 4.1.1 requires that the issue of the Earn-In Shares be approved by an ordinary resolution of
the existing shareholders of the Company.
As referred to above under the heading “Takeovers Code Implications”, the issue of the Earn-In Shares
to 2384 LP’s is required to be approved in accordance with the Code, given that 2384 LP’s shareholding
percentage in the Company would exceed 20% should a meaningful portion of the Earn-In Shares be
issued to 2384 LP in accordance with the Earn-In Mechanism.
In accordance with Rule 7(d) of the Code, the allotment of the Earn-In Shares to 2384 LP is required to
be approved by an ordinary resolution as an exception to Rule 6 of the Code.
The Code requires the Company to obtain an Independent Adviser’s Report. The purpose of the
Independent Adviser’s Report is to assess the merits of the proposed allotment of the Consideration
Shares to the Allottees having regard to the interests of those persons who may vote to approve the
allotment. Armillary Limited has prepared such a Report and a copy of it accompanies this Notice of
Meeting. The appointment of Armillary Limited was approved by the Takeovers Panel.
The information required under Rule 16 of the Takeovers Code is set out in Appendix 2 of this Notice of
Meeting.
ISSUE PRICE
The Board believes that the issue price of not less than $0.025 for each of the Earn-In Shares represents
fair value to the Company given the Earn-In Shares are being issued at the same issue price as the
Consideration Shares (and the Directors’ Fee Shares, the Excalibur Shares and potentially the Capital
Raise Shares) that are to be issued on completion of the Reverse Listing Transaction (as further
discussed in the explanatory notes for Resolution 2).
VOTING RESTRICTIONS
2384 LP and its’ Associates (as that term is defined I the Takeovers Code) and their Associated Persons
(as that term is defined in the Listing Rules) are prohibited from voting on this resolution.
RESOLUTIONS 4: ISSUE OF 120,000,000 NEW ORDINARY FULLY PAID SHARES TO INVESTORS (CAPITAL
RAISE SHARES) – ORDINARY RESOLUTION – LISTING RULE 4.1
GENERAL
In conjunction with the completion of the Reverse Listing Transaction, the Company proposes to issue
up to an additional 120,000,000 new fully paid ordinary shares in the Company (Capital Raise Shares) to
investors elected or identified by the Company at an issue price of not less than $0.025 per Capital Raise
Share. The Capital Raise Shares are the same class of share as the existing ordinary shares on issue in the
Company.
As prospective financial information is not included in the Profile, it is expected that the NZX will impose
as a condition of completion of the reverse listing a restriction on the Company from utilising the
Quoted Financial Product regime (QFP regime), until the Company has published consolidated full year
or half year audited historical financial statements for the Company under Listing Rule 3.5, which will
prevent offers to retail investors until after those results are published. In addition, under the Financial
Markets Conduct Act 2013 offers to retail investors under the QFP regime are not permitted until at
least 3 months after completion of the reverse listing (i.e. until at least 29 June 2024).
Any funds raised from the issue of the Capital Raise Shares would be applied by the Company towards
the Being AI Group’s primary near- and medium-term strategic objectives, which include:
• Funding the ongoing working capital requirements of the Being AI Group;
• Funding potential new investments into new proprietary products to be developed by the Company
and/or equity investments into technology focused companies;
• Investing in the Being AI Group’s human capital by hiring additional employees.
More information about the Being AI Group’s operations, strategies and plans is contained in section 3
of the Profile.
The Capital Raise Shares will each have an issue price of not less than $0.025 per share. As at the date of
this Notice, the Company has not yet entered into any formal subscription agreements for the Capital
Raise Shares nor finalised whether any Capital Raise Shares will be issued. It is proposed that the Capital
Raise Shares may be placed to investors prior to the date of the completion of the Reverse Listing
Transaction. ACE will advise the market should it enter into subscription agreements in respect of the
Capital Raise Shares, whether before or after completion of the Reverse Listing Transaction.
Dilutionary Impact
Following the issue of all 120,000,000 Capital Raise Shares, those investors who subscribe for the Capital
Raise Shares would hold 6.04% of the shares on issue in the Company.
REQUIREMENT FOR RESOLUTION
Listing Rule 4.1.1 requires that the issue of the Capital Raise Shares be approved by an ordinary
resolution of the existing shareholders of the Company.
ISSUE PRICE
The Board believes that the issue price of not less than $0.025 for each of the Capital Raise Shares
represents fair value to the Company, given that the Capital Raise Shares are being issued at an e issue
price not less than the issue price of the Consideration Shares (and the Directors’ Fee Shares and the
Excalibur Shares) that are to be issued on completion of the Reverse Listing Transaction (as further
discussed in the explanatory notes for Resolution 2).
VOTING RESTRICTIONS
Those parties who agree to subscribe for the Capital Raise Shares, and their Associated Persons (as that
term is defined in the Listing Rules) are prohibited from voting on this resolution.
RESOLUTION 5: ISSUE OF 30,720,000 NEW ORDINARY FULLY PAID SHARES TO EXCALIBUR CAPITAL
PARTNERS LIMITED – ORDINARY RESOLUTION – LISTING RULES 4.1.1 AND 5.2.1
GENERAL
In 2020, Excalibur negotiated to acquire a loan of circa $360,000 owed by the Company (then TRS
Investments Limited) from Huahan International Holdings (Hong Kong) Co Limited. Since that time,
Excalibur has continued to fund the ongoing costs of the Company, i.e., NZX listing fees, share registry
fees, audit fees, accounting fees, legal fees and other costs, with the intention that the Company would
ultimately find a suitable business to merge with, or acquire.
On the date of completion of the Reverse Listing, the Company will have debt of circa $1,158,000, of
which circa $768,000 is currently owed to Excalibur Capital Partners Limited (Excalibur Indebtedness), a
company associated with Sean Joyce, a director of the Company. Otherwise, the Company's liabilities
are to existing directors for accrued but unpaid directors fees, and minor trade creditors relating to
maintaining its status as an NZX listed company.
In conjunction with the completion of the Reverse Listing Transaction, the Company proposes to issue to
30,720,000 new fully paid ordinary ACE Shares to Excalibur at an issue price of $0.025 per share
(Excalibur Shares). The issue of the Excalibur Shares will extinguish $768,000 of the Excalibur
Indebtedness and ensure that ACE is largely debt free, with the exception of a maximum of $50,000 of
liabilities as at the completion of the transaction.
The Excalibur Shares will each have an issue price of $0.025 per share. If Resolutions 1 to 12 are
approved, the Excalibur Shares would be issued by the Company to Excalibur contemporaneously with
the settlement of the Reverse Listing Transaction.
Issue Price
The Board believes that the issue price of $0.025 for each of the Excalibur Shares to Excalibur represents
fair value to the Company given that the Excalibur Shares are being issued at the same issue price as the
Consideration Shares, the Directors’ Fees Shares and the Capital Raise Shares.
Dilutionary Impact
The Excalibur Shares would represent 1.64% of the total number of shares on issue in the Company after
the completion of the Restructure assuming no Capital Raise Shares are issued.
REQUIREMENT FOR RESOLUTION
Listing Rule 4.1.1 require that the issue of the Excalibur Shares be approved by an ordinary resolution of
the existing shareholders of the Company.
Excalibur is a Related Party of the Company (as that term is defined in the Listing Rules) due to it holding
more than 10% of the shares on issue in the Company, and also because its shareholder and director is
Sean Joyce, is also a director of the Company.
The proposed issue of the Excalibur Shares to Excalibur constitutes a “Material Transaction” in terms of
the Listing Rules. Listing Rule 5.2.1 provides that the Company cannot enter into a Material Transaction
with a Related Party unless that Material Transaction is approved by an ordinary resolution of the
shareholders of the Company.
APPRAISAL REPORT
Listing Rule 7.8.8(b) requires an Appraisal Report to be prepared where a meeting of shareholders will
consider a resolution required by Listing Rule 5.2.1 (as is the case with the proposed issue of the
Excalibur Shares to Excalibur Capital Partners Limited).
The Appraisal Report is incorporated in the Independent Adviser’s Report and Appraisal Report that
accompanies this Notice. Armillary Limited has prepared the Independent Adviser’s Report and
Appraisal Report. The appointment of Armillary Limited was approved by NZX Limited.
VOTING RESTRICTIONS
Excalibur Capital Partners Limited and its Associated Persons (as that term is defined in the Listing Rules)
are prohibited from voting on this resolution.
RESOLUTION 6: ISSUE 15,800,000 NEW ORDINARY FULLY PAID SHARES (DIRECTORS’ FEE SHARES) TO
ALL EXISTING DIRECTORS AND ONE FORMER DIRECTOR IN SATISFACTION OF ACCRUED DIRECTORS
FEES – ORDINARY RESOLUTION – LISTING RULES 4.1.1 AND 5.2.1
GENERAL
Given that the Company has not generated any trading income, the directors of the Company agreed
that their annual Directors’ fees should accrue and remain unpaid until such time as a reverse listing
transaction was to eventuate.
Directors of the Company have not been paid any directors fees for five years in the case of Keith
Jackson and John Cilliers, and since 2020 in the case of Roger Gower and Joyce. A former director of the
Company, Joe van Wijk, is also owed directors’ fees.
Keith Jackson and John Cilliers are each owed $100,000 of accrued but unpaid directors’ fees, Messrs
Gower and Joyce are owed $75,000 of accrued but unpaid directors’ fees, and Joe van Wijk is owed
$45,000 of accrued but unpaid directors’ fees.
The five existing or former Directors have each agreed to accept the issue of new shares in the Company
in settlement of the outstanding directors’ fees owing to them.
In conjunction with the completion of the Reverse Listing Transaction, the Company proposes to issue to
15,800,000 new fully paid ordinary ACE shares at an issue price of $0.025 per share (Directors’ Fee
Shares) to the directors in the following amounts:
• Keith Jackson: 4,000,000 new ACE shares.
• John Cilliers: 4,000,000 new ACE shares.
• Roger Gower: 3,000,000 new ACE shares.
• Sean Joyce: 3,000,000 new ACE shares.
• Joe van Wijk: 1,800,000 new ACE shares.
The issue of the Directors’ Fee Shares will extinguish up to $395,000 of the Company’s indebtedness to
the directors and ensure that ACE is largely debt free, with the exception of a maximum of $50,000 of
liabilities as at the completion of the transaction.
If Resolutions 1 to 12 are approved, the Directors’ Fee Shares would be issued by the Company to the
four directors contemporaneously with the settlement of the Reverse Listing Transaction.
Issue Price
The Board believes that the issue price of $0.025 for each of the Directors’ Fee Shares to the directors
represents fair value to the Company, given that the Directors’ Fee Shares are being issued at the same
issue price as the Consideration Shares, the Excalibur Shares and potentially the Capital Raise Shares.
Dilutionary Impact
The Directors’ Fee Shares will represent 0.85% of the total number of shares on issue in the Company
after the completion of the Restructure assuming no Capital Raise Shares are issued.
REQUIREMENT FOR RESOLUTION
Listing Rule 4.1.1 require that the issue of the Directors’ Fee Shares be approved by an ordinary
resolution of the existing shareholders of the Company.
The directors are each a Related Party of the Company (as that term is defined in the Listing Rules) due
to them being directors of the Company.
The proposed issue of the Directors’ Fee Shares to the directors constitutes a “Material Transaction” in
terms of the Listing Rules. Listing Rule 5.2.1 provides that the Company cannot enter into a Material
Transaction with a Related Party unless that Material Transaction is approved by an ordinary resolution
of the shareholders of the Company.
APPRAISAL REPORT
Listing Rule 7.8.8(b) requires an Appraisal Report to be prepared where a meeting of shareholders will
consider a resolution required by Listing Rule 5.2.1 (as is the case with the proposed issue of the
Directors’ Fee Shares to the directors).
The Appraisal Report is incorporated in the Independent Adviser’s Report and Appraisal Report that
accompanies this Notice. Armillary Limited has prepared the Independent Adviser’s Report and
Appraisal Report. The appointment of Armillary Limited was approved by NZX Limited.
VOTING RESTRICTIONS
Each director and their Associated Persons (as that term is defined in the Listing Rules) are prohibited
from voting on this resolution.
RESOLUTIONS 7, 8 AND 9: APPOINTMENT OF DIRECTORS – ORDINARY RESOLUTIONS
The constitution of the Company and the Listing Rules both require there to be at least three directors
of the Company, two of whom must be resident in New Zealand, and two of whom must be
independent directors (as that term is defined in the Listing Rules).
It is anticipated that following completion of the Reverse Listing Transaction:
• Keith Jackson andJohn Cilliers will resign from the Board with effect from completion of the Reverse
Listing Transaction. Sean Joyce and Roger Gower have each agreed to remain on the Board; and
• David McDonald, Katherine Allsopp-Smith and Joe Jensen (Proposed Additional Directors) will be
appointed to the Board of the Company with effect from Completion.
Sean Joyce would act as Chair of the Board with effect from Completion.
Joe Jenson and Roger Gower will be independent directors for the purposes of the Listing Rules.
Ordinary resolutions approving the appointment of each of the Proposed Directors are sought. The
appointment of the three new directors will be effective from Completion.
Biographies for each of the Proposed Directors are provided below:
David McDonald
David is a well-regarded participant in the AI, Web3, and digital transformation sectors, with over two
decades of pioneering the tech landscape. He founded Altered State Machine (ASM), which achieved
New Zealand's largest seed funding round and comprised the largest piece in the formation of
Futureverse, a $1 billion 'Kiwi unicorn.' His patented AI technology is a core component of the
Futureverse's platform.
Under David's leadership, the industry leading R&D department created ground-breaking projects like
Jen ai, an AI music composer. David's vision extends to fostering global partnerships and collaborations,
with ASM and Futureverse engaging with global brands such as Warner Bros Discovery, Authentic
Brands Group, Muhammad Ali Enterprises, FIFA, Snoop Dogg, and Warner Music. David’s forward-
thinking approach in transforming complex concepts into practical solutions positions him as a dynamic
force in the tech industry, continually shaping the future of technology with innovative solutions.
David enjoys restoring and collecting cars, with a particular love for JDM classics, doing wood and metal
work and creating video games. Through Futureverse, David was able to donate over $1 million to the
Auckland City Mission last year and continues to support that cause. David belongs to Ngāi Tahu iwi.
As David’s investment vehicle 2384 LP will hold a significant number of ACE shares post completion of
the Restructure, David will not be an “independent director” of the Company (as that term is defined in
the Listing Rules).
Katherine Allsopp-Smith
Katherine is a Design graduate from Auckland University of Technology and is actively involved with
2061.ai, Te Turanga Ukaipo Charitable Trust (previously AGE Foundation Charitable Trust), AGE School,
Send Global, Wilshire Group and Aspen Colorado based property business, CM LLC.
Katherine’s passions lie at the intersection of business, environmental sustainability and emotional
wellbeing. Katherine is of Polynesian descent.
As Katherine’s investment vehicle 2061 LP will hold a significant number of ACE shares post completion
of the Restructure, Katherine will not be an “independent director” of the Company (as that term is
defined in the Listing Rules). Katherine’s husband, Evan Christian, is the co-owner of 2061 LP and will
act as her alternate director of the Company (and will be entitled to attend a board meeting in her place
if she is not able to attend a board meeting).
Joe Jensen, Independent Director
Joe resides in the State of Arizona and has completed an MBA from W.P. Carey School of Business,
Arizona State University. He also holds a Bachelor of Electrical Engineering degree from South Dakota
State University.
Joe has a storied career in the technology sector in North America and held various senior executive
roles during his 38-year tenure at Intel Corporation. His last role, held until his retirement from Intel in
2022, was as Vice President, Internet of things Group – General Manager, Retail, Banking, Hospitality &
Education. Previous roles at Intel included General Manager of the Low Power Embedded Products
Division, and General Manager of the Embedded Computing Division at Intel Corporation.
Joe brings with him a vast amount of industry and technical experience. The Board consider that Joe will
be an independent director as that term is defined in the Listing Rules and is very pleased to have
secured an independent director of Joe’s calibre.
VOTING RESTRICTIONS
There are no voting restrictions in respect of resolutions 7, 8 and 9.
RESOLUTION 10: APPROVAL OF DIRECTORS FEES – ORDINARY RESOLUTION
The Vendors have requested approval of Resolution 10 be sought, to obtain approval for the maximum
aggregate Directors remuneration to be increased by $220,000 from $80,000 per annum to a maximum
sum of $300,000 in respect of each financial year following the Restructure (on the basis that the
Company will have 5 directors). It is anticipated that the directors’ remuneration will be paid as follows:
• $85,000 per annum shall be paid to the Chair of the Board of Directors of the Company, however
given Sean Joyce, who will be Chair, will also hold an executive role with the Company – no
directors fees shall be payable to him in his capacity as Chair;
• $65,000 per annum shall be paid to each non-executive director of the Company; and
• No directors’ fees shall be payable to any executive directors of the Company.
The Vendors consider this an appropriate level of remuneration to attract and retain directors of an
appropriate level of expertise and experience to the Company given the size of the Being AI Group’s
commercial operations, and the level of involvement that the Board is expected to have in the
operations of the business. Currently, directors’ fees of $80,000 are payable to Directors of the
Company in aggregate (given the current non-trading nature of the Company). Accordingly, the
Proposed directors’ remuneration of $300,000 will represent an increase of $220,000 to the level of
directors fees currently payable by the Company.
In the event of an increase in the total number of Directors holding office, the Directors may, without
the authorisation of an ordinary resolution of shareholders, increase the total remuneration by such an
amount as is necessary to enable the Company to pay the additional Director or Directors of the
Company remuneration not exceeding the average amount then being paid to each of the other non-
executive Directors (other than the chairperson) of the Company.
VOTING RESTRICTIONS
No person intended to receive directors’ fees, and no Associated Person (as that term is defined in the
Listing Rules) of that person may vote on Resolution 10.
RESOLUTION 11: ISSUE OF UP TO 132,000,000 OPTIONS TO EMPLOYEES, CONTRACTORS, AND NON-
EXECUTIVE DIRECTORS - ORDINARY RESOLUTION – LISTING RULE 4.2.1
General
The Vendors have requested approval of resolution 11 be sought, which seeks approval to issue up to
132,000,000 options to acquire ordinary shares in the Company (Options) to employees, contractors
and non-executive directors of the Company, and of Being AI Group post completion of the Restructure
(Group). The approval sought under resolution 11 includes approval to issue 132,000,000 ordinary
shares in the Company upon exercise of the Options.
Each Option, once issued, permits the holder of an Option to give notice to the Company of his or her
intention to exercise the Option and to be issued one new ordinary share in the Company for every
Option exercised. The Option can only be exercised during the exercise period, being five years from the
relevant vesting date (which will vary between Option holders), and upon the payment by the holder of
each Option of the exercise price for each Option, to the Company.
The Vendors consider that it is beneficial for the Company to offer and to subsequently issue Options to
certain current and future employees, contractors, and non-executive directors of the Group, for the
following reasons:
• The issue will encourage recipients of the Options to hold shares in the Company assists in
encouraging a high level of commitment and retention, and aligns their interests with those of
external investors;
• The Options will only be issued to targeted recipients who are considered to be particularly valuable
to the growth and development of the Company;
• The structure of the issue of the Options will assist the Company in retaining the key staff of the
Group for the future;
• The opportunity to offer Options to prospective new employees and non-executive directors will
assist the Company in securing the services of those parties as part of the package available to be
offered to those parties;
• The offer of Options provides an appropriate way to incentive employees and non-executive
directors without the Company incurring a direct cash cost.
The Options are proposed to be allocated and issued by the new Board of the Company post completion
of the Restructure to certain existing or future employees and non-executive directors of the Company
as determined by the Board. For the purposes of Listing Rule 7.8.5(b), it is the intention of the new
Board that the vast majority of the Options will be granted to employees of the Group, and not to
directors or associated persons of directors.
Dilutionary impact of exercise of Options
Total Options Pool
The total pool of Options proposed to be approved by shareholders represents 7.07% of the total
number of shares proposed to be on issue as at the date of the completion of the Restructure.
In the event that:
• All 132,000,000 Options were issued;
• All 132,000,000 Options were exercised; and
• No further shares were issued by the Company, other than the Consideration Shares, the Directors’
Fee Shares, and the Excalibur Shares,
the holders of the Options would hold 132,000,000 shares in the Company (in aggregate), representing
approximately 7.07% of the total number of shares on issue post the completion of the Restructure
assuming no Capital Raise Shares are issued.
Terms of issue of the Options
The principal terms of the Options are as follows:
• Each Option entitles the holder to acquire one ordinary share in the Company;
• The exercise price payable in respect of each Option will not be less than $0.025 per Option;
• The Options shall vest in the Option holder over five years in five equal tranches starting on the first
anniversary of the date of their issue;
• The Options must be exercised within five years from the relevant vesting date (which will vary
between holders), after which date the Option shall lapse (Exercise Period);
• Should the services of the holder of an Option cease to be retained by the Company or any of its
subsidiaries prior to a tranche of Options vesting in the holder, other than due to death or illness,
then those Options will lapse. In the case of death or illness, any unvested Options will lapse, and
any vested but unexercised Options must be exercised within 30 days of the holder’s death or
illness those Options will lapse;
• Shares issued upon exercise of an Option shall be credited as fully paid and rank equally in all
respects with shares on issue at the relevant exercise date (except for any dividend or other
entitlement where the entitlement date occurs prior to the exercise date);
• The Options are not transferable without the prior approval of the Company in writing;
• The Options shall not confer on the holder the right to participate in rights issues undertaken by the
Company;
• The holders of the Options will not be entitled to vote at any meeting of the shareholders of the
Company;
• On any consolidation, subdivision or other reconstruction of shares the number of shares over
which each Option is exercisable will be adjusted in proportion to the reconstruction, and the
aggregate exercise price will remain unchanged,
and otherwise on the terms set out in the Option Agreement to be entered into between the Company
and each holder of the Options.
REQUIREMENT FOR RESOLUTION
Listing Rule 4.2.1 states in general terms, that shareholder approval by ordinary resolution must be
obtained for any issue of Equity Securities (which includes the Options) by the Company and,
accordingly, shareholder approval by ordinary resolution is being sought in accordance with Listing Rule
4.2.1. In approving the issue of the Options, Shareholders are also effectively approving the issue of new
ordinary shares to the holders of the Options following the exercise of an Option by a holder of an
Option.
RESOLUTION 12: ISSUE OF UP TO 280,000,000 NEW ORDINARY FULLY PAID SHARES TO THIRD PARTIES
(“POST COMPLETION SHARES”) – ORDINARY RESOLUTION – LISTING RULE 4.2.1
GENERAL
The Vendors have requested that approval of resolution 12 be sought.
The Vendors wish to seek the approval of shareholders to enable them to issue up to a further
280,000,000 new fully paid ordinary shares in the Company (Post Completion Shares) to investors and
potential vendors of businesses to be acquired by the Company post completion of the Restructure at
an issue price of not less than $0.025 per Post Completion Share, to assist with ongoing funding
requirements of the Being AI Group. The Post Completion Shares would be the same class of share as
the existing ordinary shares on issue in the Company.
The Post Completion Shares would be required to be issued within 12 months from the date of the
Special Meeting. In the event that they were not issued within this timeframe, the approval to issue the
Post Completion Shares would lapse.
The purpose of seeking approval to potentially issue the Post Completion Shares would be to provide
the new Board of the Company with maximum flexibility to issue the Post Completion Shares with a
view to:
• Raising new capital to apply towards funding the cash component of any acquisition or new
investment;
• Be used as consideration to partially fund a potential acquisition of a new business through the
issue of new shares in the Company, in lieu of the payment of cash;
• Funding the development of any new proprietary technology.
The Post Completion Shares will each have an issue price of not less than $0.025 per share. The
expectation would be that the Board would seek to issue the Post Completion Shares at a share price
reflective of the prevailing current market price for the Company’s shares at the time of the issue of the
Post Completion Shares.
As at the date of this Notice, the Company has not yet entered into any formal subscription agreements
for the Post Completion Shares.
REQUIREMENT FOR RESOLUTION
Listing Rule 4.1.1 require that the issue of the Post Completion Shares be approved by an ordinary
resolution of the existing shareholders of the Company.
ISSUE PRICE
The Board believes that the issue price of not less than $0.025 for each of the Post Completion Shares
represents fair value to the Company given that the Post Completion Shares are being issued at a price
not less than the issue price for the Consideration Shares that are to be issued.
RESOLUTION 13: REVOCATION OF EXISTING CONSTITUTION AND ADOPTION OF A NEW
CONSTITUTION – SPECIAL RESOLUTION
This special resolution seeks shareholder approval to revoke the Company’s existing constitution
(Current Constitution) and replace it with an updated constitution (Proposed Constitution). The
amendments that the Proposed Constitution contemplates can be described as administrative in nature
and are required to comply with the current version of the NZX Listing Rules, which were last updated
with effect from 15 January 2024.
Key changes under the Proposed Constitution include:
• Inserting a provision requiring the Company to comply with the minimum board composition
requirements of the Listing Rules;
• Amending the clauses relating to director rotation to incorporate the requirements of the Listing
Rules by reference to the Listing Rules; and
• Inserting a requirement that voting at meetings of shareholders will be conducted by poll.
In accordance with the NZX Listing Rules, the Proposed Constitution also provides that if there is any
provision in the Proposed Constitution that is inconsistent with the NZX Listing Rules relevant to the
Company, the NZX Listing Rules (as amended by any waiver or ruling relevant to the Company) will
prevail.
Shareholders can view a copy of the Proposed Constitution at https://ascensioncapital.co.nz – refer to
“Corporate Governance section”. The NZX Listing Rules can be viewed at www.nzx.com.
The adoption of the Proposed Constitution would not impose or remove a restriction on the Company’s
activities, and accordingly no rights arise under section 110 of the Companies Act.
RESOLUTION 13: APPOINTMENT OF WILLIAM BUCK AS AUDITOR AND AUTHORISATION OF THE
BOARD TO FIX AUDITOR’S REMUNERATION
The Company’s auditor is currently BDO operating from Wellington. On completion of the Reverse
Listing Transaction, and commencement of new businesses based in Auckland, the Board of the
Company has agreed with William Buck to recommend the appointment of William Buck as auditor in
place of BDO, and seeks shareholder approval for the appointment and to authorise the Board to fix
their remuneration.
APPENDIX 1
INFORMATION REQUIRED BY THE TAKEOVERS CODE IN RESPECT OF RESOLUTION 2 – ISSUE OF
1,800,000,000 NEW VOTING SECURITIES (“CONSIDERATION SHARES”) TO THE SHAREHOLDERS OF
THE BEING AI GROUP
1. Identity of the Allottees and Controllers of the Consideration Shares
The Consideration Shares being allotted pursuant to Resolution 2 are being allotted to the
following shareholders in the Being AI Group or their nominee (Allottees), in the following
amounts:
Name of Shareholder of Being AI
(each an “Allottee”). Each Allottee named is the
holder of and controller of voting rights in respect
of the shares to be allotted, except to the extent
that another controller of those voting rights is
specified below.
Number of new
Consideration
Shares to be
issued
% of control of
the Group post
Reverse Listing
Transaction and
Restructure
(excluding
Capital Raise
Shares)
2061 LP
Controllers: Evan Christian and Katherine Allsopp-
Smith
1,270,000,000 67.97%
Te Turanga Ukaipo Charitable Trust
Controllers: Evan Christian and Katherine Allsopp-
Smith
250,000,000 13.38%
2384 LP
Controller: David McDonald
200,000,000 10.71%
Excalibur Capital Partners Limited
Controller: Sean Joyce
80,000,000 4.28%
Total 1,800,000,000 96.34%
2. Particulars of the voting securities being allotted
A total of 1,800,000,000 new voting securities (Consideration Shares) are proposed to
be allotted to the Allottees, with the number of Consideration Shares to be allotted to
each Allottee as specified above.
The Consideration Shares will represent 96.34% of the aggregate of the existing voting
securities on issue in the Company, immediately after the issue of the Consideration Shares,
and the percentage held or controlled by each Allottee immediately after the issue of the
Consideration Shares is as specified above except, including the issue of shares under the
Debt Capitalisation, Excalibur Capital Partners Limited’s percentage would be 5.14%.
The Allottees will in aggregate hold or control 97.20% of all of the voting securities on issue in
the Company after the issue of the voting securities referred to in resolutions 2, 5 and 6.
4
However, each Allottee is free to act in their interests and therefore they should not be
regarded collectively as associates acting “in concert” from the time of allotment.
4
This percentage has been calculated to include the 3,000,000 Directors Fee Shares that will be issued to Excalibur Capital
Partners Limited relating to Sean Joyce’s directorship, on completion of the Restructure.
No Associates (as that term is defined in the Takeovers Code) of the Allottees:
(a) hold any voting securities in the Company; or
(b) will subscribe for any Directors’ Fee Shares, with the exception of Sean Joyce,
who is an associate of Excalibur Capital Partners Limited, and will receive
3,000,000 Directors’ Fee Shares; or
(c) will subscribe for any Excalibur Shares; or
(d) will subscribe for any Capital Raise Shares.
Accordingly, the Allottee and the Allottee’s Associates will for a moment in time and in
aggregate hold or control 97.20% of all of the voting securities on issue in the
Company. However, as noted, each Allottee is free to exercise voting rights
independently of the other from the time of allotment.
3. Issue Price for Voting Securities
The issue price for the Consideration Shares is $0.025 for each Consideration Share to be
allotted.
The payment of the issue price for the Consideration Shares will be satisfied upon the
completion of the acquisition of the Being AI Group by the Company. The consideration for
the subscription for the Consideration Shares will be satisfied by the transfer by the Vendors
of the Being AI Group to the Company.
4. Reasons for the allotments
The reasons for the Company issuing and allotting the Consideration Shares to the Allottee
are as follows:
(a) The Company has entered into the Sale Agreement with the Vendors which provides for
the acquisition of the Being AI Group;
(b) The Sale Agreement provides for, amongst other matters, the Company to issue the
Consideration Shares to the Allottees in satisfaction of the initial purchase price payable
by the Company to acquire the Being AI Group.
5. The allotment under Resolution 2, if approved, will be permitted under Rule 7(d) of the
Takeovers Code as exceptions to Rule 6 of the Takeovers Code.
6. Statements in accordance with Rule 16(g) of the Takeovers Code have been provided to the
Company by the Allottees.
The Allottees have each confirmed that there are no agreements or arrangements (whether
legally enforceable or not) that have been, or are intended to be, entered into between the
Allottees and any other person (other than between the Allottees and the Company in
respect of the matters referred to in paragraphs 1 to 5 above) relating to the allotment,
holding or control of the voting securities to be allotted, or to the exercise of voting rights in
the Company.
7. The report from an independent adviser that complies with Rule 18 of the Takeovers Code
accompanies this Notice of Meeting.
8. The statement by the Directors of the Company required by Rule 19 of the Takeovers Code is
set out below.
Directors’ Statement
The Directors (excluding Sean Joyce given his interest in the resolution) unanimously recommend
approval of the allotment of the Consideration Shares referred to in Resolution 2.
The reasons for the recommendation in relation to Resolution 2 are that:
(a) The issue of the Consideration Shares to the Allottee will enable the Company to satisfy the
payment of the initial purchase price payable by the Company to the Vendors to acquire the
Being AI Group under the Sale Agreement.
(b) The Directors believe that the acquisition of the Being AI Group should have materially positive
benefits for the Company for the following reasons:
(i) The body of the Being AI Group assets, namely the Send Global business, is an
established business with a significant trading history.
(ii) The revenues and earnings for Send Global are steady.
(iii) The business sectors in which Send Global and AGE School operates are relatively stable
and non-volatile.
(iv) The Board considers that Send Global and AGE School have a great deal of opportunity
to continue to grow both organically and via acquisitions.
(v) Send Global has an experienced executive team well entrenched in the logistics and
parcels sector.
(vi) AGE School has an experienced executive team.
(vii) Being Consultants Limited has an executive team with significant intellectual capital to
advance the Being Consultants, Being Labs and Being Ventures initiatives.
(viii) The growth and investment opportunities for Being Consultants Limited, Being Labs and
Being Ventures represent a genuinely exciting opportunity for the Company post
Restructure given the dynamic nature of the AI and technology sectors.
(c) The Directors consider that the issue price for the Consideration Shares is fair and reasonable to
the Company.
(d) Having regard to the current cash resources of the Company, the value attributed to the
Company as a listed shell as part of the Restructure, and the business opportunity afforded to the
Company with the Reverse Listing Transaction, the Board believes that the proposed Reverse
Listing Transaction and the Restructure presents a credible and exciting opportunity for the
Company and its shareholders. On completion, the group will have cash and lines of credit in
excess of $5 million.
APPENDIX 2
INFORMATION REQUIRED BY THE TAKEOVERS CODE IN RESPECT OF RESOLUTION 3 – POTENTIAL
ISSUE OF UP TO 1,399,992,000 NEW VOTING SECURITIES (“EARN-IN SHARES”) TO 2384 LP
1. Identity of the Allottee and Controllers of the Earn-in Shares
Pursuant to Resolution 3, up to 1,399,992,000 new Earn-In Shares may be allotted to 2384 LP
(controlled by David McDonald) (Allottee). The control of the Group by the Allottee
immediately prior to and immediately after the issue of all of the Earn-In Shares is as follows:
Total shares held by Allottee prior to the issue of the new Earn-
In Shares
200,000,000
% of control of the Group by the Allottee prior to the issue of
the new Earn-In Shares (excluding Capital Raise Shares)
10.71%
Total shares held by Allottee immediately after issue of the new
Earn-In Shares
1,599,992,000
% of control of the Group by Allottee immediately after the
issue of the new Earn-In Shares (excluding Capital Raise Shares)
48.96%
2. Particulars of the voting securities being allotted
Up to a total of 1,399,992,000 new voting securities (Earn-In Shares) are proposed to
be allotted to the Allottee.
The Earn-In Shares will represent up to 42.87% of the existing voting securities on issue in the
Company, immediately after the issue of the Earn-In Shares and assuming that no Capital
Raise Shares are issued.
Immediately after the issue of all of the Earn-In Shares, the Allottee may hold or control up to
48.96%
5
of all of the voting securities on issue in the Company. This percentage comprises of
the Earn-In Shares and the number of Consideration Shares to be allotted to the Allottee in
accordance with resolution 2 and assumes that no Capital Raise Shares are issued.
No Associates (as that term is defined in the Takeovers Code) of the Allottee:
(a) hold any voting securities in the Company; or
(b) will subscribe for any of Consideration Shares; or
(b) will subscribe for any Directors’ Fee Shares; or
(c) will subscribe for any Excalibur Shares; or
(d) will subscribe for any Capital Raise Shares.
Accordingly, the Allottee and the Allottee’s Associates will hold or control a maximum
of 48.96% of all of the voting securities on issue in the Company.
5
This calculation disregards the in-concert allotment of Consideration Shares to otherwise unrelated Vendors under
resolution 2. As discussed above, the other Vendors are free to deal in the shares allotted to them independently of 2384
LP and do not consider themselves as having a business, personal of ownership relationship such that they should in the
circumstances be regarded as associates. But, for completeness, if all Vendors, and Excalibur Capital Partners Limited, were
to be regarded as associates merely because they are to be allotted shares at the same time as part of the Restructure, the
maximum control percentage of 2384 LP if the maximum Earn-in Shares are issued together with the in-concert parties
would be >99.00%.
3. Issue Price for Voting Securities
The issue price for the Earn-In Shares is not less than $0.025 for each Earn-In Share to be
allotted.
The payment of the issue price for the Earn-In Shares will be satisfied incrementally through
the attainment of certain share price milestones for the Shares in the future, pursuant to an
“earn-in” mechanism.
4. Reasons for the allotments
The reasons for the Company issuing and allotting the part or all of the Earn-In Shares to the
Allottee is as follows:
(a) The Company has entered into the Sale Agreement with the Vendors which provides for
the acquisition of Being Consultants Limited; and
(b) The Sale Agreement provides for, amongst other matters, the Company to issue part or
all of the Earn-In Shares to the Allottee in satisfaction of the total purchase price payable
by the Company to acquire Being Consultants Limited if certain share price milestones for
the Shares are attained in the future, pursuant to an “earn-in” mechanism.
5. The allotment under Resolution 3 if approved, will be permitted under Rule 7(d) of the
Takeovers Code as exceptions to Rule 6 of the Takeovers Code.
6. Statements in accordance with Rule 16(g) of the Takeovers Code have been provided to the
Company by the Allottee.
7. The Allottee has confirmed that there are no agreements or arrangements (whether legally
enforceable or not) that have been, or are intended to be, entered into between the Allottee
and any other person (other than between the Allottee and the Company in respect of the
matters referred to in paragraphs 1 to 5 above) relating to the allotment, holding or control of
the voting securities to be allotted, or to the exercise of voting rights in the Company.
8. The report from an independent adviser that complies with Rule 18 of the Takeovers Code
accompanies this Notice of Meeting.
9. The statement by the Directors of the Company required by Rule 19 of the Takeovers Code is
set out below.
Directors’ Statement
The Directors unanimously recommend approval of the allotment of the Earn-In Shares referred to in
Resolution 3.
The reasons for the recommendation in relation to Resolution 2 are that:
(a) The issue of the Earn-In Shares to the Allottee will enable the Company to satisfy the payment of
the total purchase price payable by the Company to acquire Being Consultants Limited under the
Sale Agreement.
(b) The Directors believe that the acquisition of Being Consultants Limited should have materially
positive benefits for the Company for the following reasons:
(i) Being Consultants has an executive team with significant intellectual capital to advance
the Being Consultants, Being Labs and Being Ventures initiatives.
(ii) The growth and investment opportunities for Being Consultants, Being Ventures and
Being Labs represent a genuinely exciting and significant opportunity for the Company
post restructure given the dynamic nature of the AI and technology sectors.
(iii) The Earn-In Shares will only be issued in circumstances where the Company’s shares are
trading at a much higher price than $0.025 cents per share price for the Reverse
Takeover Transaction.
(c) The Directors consider that the issue price for the Earn-In Shares is fair and reasonable to the
Company.
(d) Having regard to the current cash resources of the Company, the value attributed to the
Company as a listed shell as part of the Restructure, and the business opportunity afforded to the
Company with the Reverse Listing Transaction, the Board believes that the proposed Reverse
Listing Transaction and the Restructure presents a credible and exciting opportunity for the
Company and its shareholders. On completion, the group will have cash and lines of credit in
excess of $5 million.
APPENDIX 3 – MINORITY BUY OUT RIGHT
Minority Buy-Out Right
1.1 The information in this Appendix contains information about the ability of shareholders who vote
against resolution 1 to require the Company to acquire their shares in accordance with section 110 of
the Companies Act 1993 (Companies Act).
Shareholders may require Company to purchase shares
1.2 Section 110 of the Companies Act provides that where:
(a) a shareholder is entitled to vote on a major transaction (such as the Acquisition of the Being AI
Group); and
(b) the shareholders of the Company approve the resolution approving the major transaction; and
(c) a shareholder (Dissenting Shareholder) cast all the votes attached to shares registered in the
Dissenting Shareholder's name and having the same beneficial owner against the resolution
approving the major transaction,
that Dissenting Shareholder is entitled to require the Company to purchase the shares held by the
Dissenting Shareholder in accordance with the provisions of the Companies Act.
Notice requiring purchase
1.3 Section 111 of the Companies Act provides that the Dissenting Shareholder may, within 10 working days
of the passing of the resolution at the meeting of shareholders, give a written notice to the Company
requiring the Company to purchase those shares.
1.4 Within 20 working days of the Company receiving the Dissenting Shareholder’s notice, the Board of the
Company must:
(a) agree to the purchase of the shares by the Company; or
(b) arrange for some other person to agree to purchase the shares; or
(c) apply to the Court for an order under section 114 or section 115 of the Companies Act (the
details of which are referred to below); or
(d) arrange, before taking the action concerned, for the special resolution approving the Being AI
Group transaction to be rescinded in accordance with section 106 of the Companies Act or decide
in the appropriate manner not to take the action concerned, as the case may be; and
(e) give written notice to the Dissenting Shareholder of the Board's decision regarding its proposed
course of action.
Price for shares to be purchased by Company determined
1.5 Within 5 working days of the Board giving the notice referred to above in paragraph 1.4 that the Board
agrees to the purchase of the Dissenting Shareholder’s shares, the Board must give to the Dissenting
Shareholder written notice of:
(a) the price the Company offers to pay for those shares; and
(b) how:
(i) the matters in paragraph 1.6 were calculated; or
(ii) the price was calculated under paragraph 1.7 and why calculating the price using the
methodology set out in paragraphs 1.6(a) to (c) would be clearly unfair.
1.6 The price the Company intends to pay for the shares of the Dissenting Shareholder must be a fair and
reasonable price (as at the close of business on the day before the date on which the resolution was
passed) for the Dissenting Shareholder’s shares, calculated as follows:
(a) first, the fair and reasonable value of the total shares in each class to which the shares belong
must be calculated (class value):
(b) secondly, each class value must be adjusted to exclude any fluctuation (whether positive or
negative) in the class value that has occurred (whether before or after the resolution was passed)
that was due to, or in expectation of, the event proposed or authorised by the resolution:
(c) thirdly, a portion of each adjusted class value must be allocated to the Dissenting Shareholder in
proportion to the number of shares that the Dissenting Shareholders holds in the relevant class.
1.7 However, a different methodology from that set out in paragraphs 1.6(a) to (c) may be used to calculate
the fair and reasonable price for the shares if using the methodology set out in those paragraphs would
be clearly unfair to the Dissenting Shareholder or the Company.
1.8 The Dissenting Shareholder may object to the price offered by the Board for the shares by giving written
notice to the Company no later than 10 working days after the date on which the Board gave written
notice to the Dissenting Shareholder under paragraph 1.5.
1.9 If the Company does not receive an objection to the price in accordance with paragraph 1.8, the
Company must purchase all of the Dissenting Shareholders shares at the nominated price no later than
10 working days after:
(a) the date on which the Board’s offer is accepted; or
(b) if the Board has not received an acceptance, the date that is 10 working days after the date on
which the Board gave written notice to the shareholder under paragraph 1.5.
1.10 The time periods in paragraph 1.9 do not apply if there is a written agreement between the Board and
the Dissenting Shareholder that specifically sets a different date for purchase of the shares.
Price for shares referred to arbitration if shareholder objects to price
1.11 If the Company receives an objection to the price offered for the shares by the Company:
(a) the following issues must be submitted to arbitration:
(i) the fair and reasonable price for the shares, on the basis set out in paragraphs 1.6 and 1.7;
and
(ii) the remedies available to the Dissenting Shareholder or the Company in respect of any
price for the shares that differs from that determined by the Board; and
(b) the Company must, within 5 working days of receiving the objection, pay to the Dissenting
shareholder a provisional price in respect of each share equal to the price offered by the Board.
1.12 If the price determined for the Dissenting Shareholder’s shares:
(a) exceeds the provisional price paid, the arbitral tribunal must order the Company to pay the
balance owing to the Dissenting Shareholder;
(b) is less than the provisional price paid, the arbitral tribunal must order the Dissenting Shareholder
to pay the excess to the Company.
1.13 Except in exceptional circumstances, an arbitral tribunal must award interest on any balance owing or
excess to be paid under paragraph 1.12.
1.14 If a balance is owing to the Dissenting Shareholder, an arbitral tribunal may award to the Dissenting
Shareholder, in addition to or instead of an award of interest, damages for loss attributable to the
shortfall in the initial payment.
1.15 Any sum that must be paid in accordance with the paragraphs 1.11 to 1.14 must be paid no later than 10
days after the date of the arbitral tribunal’s determination, unless the arbitral tribunal specifically orders
otherwise.
Interest payable on outstanding payments
1.16 Interest is payable on any sum that must be paid under paragraphs 1.11 to 1.14 that is outstanding after
the date on which it falls due on the basis and at the rate that the arbitral tribunal thinks fit having
regard to all of the circumstances.
Timing of transfer of shares
1.17 On the day on which the Board gives notice that the Board agrees to the purchase of the Dissenting
Shareholder’s shares by the Company pursuant to paragraph 1.4(e):
(a) the legal title to those shares passes to the Company; and
(b) the rights of the shareholder in relation to those shares end.
Court may grant exemption
1.18 The Company may apply to the Court for an order exempting it from the obligation to purchase the
Dissenting Shareholder’s shares on the grounds that:
(a) the purchase would be disproportionately damaging to the Company; or
(b) the Company cannot reasonably be required to finance the purchase; or
(c) it would not be just and equitable to require the Company to purchase the shares.
1.19 In the event that the Company sought to make an application to the Court, the Court could make an
order exempting the Company from the obligation to purchase the shares, and may make any other
order it thinks fit, including an order:
(a) setting aside the resolution approving the Acquisition of the Being AI Group;
(b) directing the Company to take, or refrain from taking, any action specified in the order;
(c) requiring the Company to pay compensation to the shareholders affected;
(d) that the Company be put into liquidation.
1.20 The Court shall not make an order under paragraphs 1.18(a) or (b) unless it is satisfied that the Company
has made reasonable efforts to arrange for another person to purchase the Dissenting Shareholder’s
shares.
Court may grant exemption if the Company is insolvent
1.21 If:
(a) a notice is given to the Company by a Dissenting Shareholder requiring the Company to acquire
their shares; and
(b) the Board has resolved that the purchase by the Company of the Dissenting Shareholder’s shares
to which the notice relates would result in the Company failing to satisfy the solvency test; and
(c) the Company has, having made reasonable efforts to do so, been unable to arrange for the
shares to be purchased by another person,
the Company must apply to the Court for an order exempting it from the obligation to purchase the
shares.
1.22 The Court may, if it is satisfied that:
(a) the purchase of the shares would result in the Company failing to satisfy the solvency test; and
(b) the Company has made reasonable efforts to arrange for the shares to be purchased by another
person,
make:
(c) an order exempting the company from the obligation to purchase the shares; or
(d) an order suspending the obligation to purchase the shares; or
(e) such other order as it thinks fit.
---
Auckland Wellington Christchurch Wanaka
Level 15, Swanson House, Level 2, City Chambers Level 1 1 Foxglove Heights
12-26 Swanson Street, 142 Featherston Street 79 Cashel Street Wanaka 9305
PO Box 105-926 PO Box 3156 Christchurch
Auckland 1143 Wellington 6140
www.armillary.co.nz/
Ascension Capital Limited
Independent Adviser’s Report and Appraisal Report
In respect of the:
• acquisition of AGE Limited, Send Global Limited, and Being Consultants Limited, and
• capitalisation of debt owing to Excalibur Capital Partners Limited and directors of
Ascension Capital Limited
11 March 2024
Statement of independence
Armillary Limited confirms that it:
• has no conflict of interest that could affect its ability to provide an unbiased report and,
• has no direct or indirect pecuniary or other interest in the proposed transaction considered in the report,
including any success or contingency fee or remuneration, other than to receive a fixed cash fee for
providing this report.
Armillary Limited has satisfied the Takeovers Panel, on the basis of the material provided to the Panel, that it is
independent under the Takeovers Code for the purposes of preparing this report.
2
Table of Contents
Table of Contents ................................................................................................................ 2
1 Glossary and Defined Terms ....................................................................................... 3
2 Overview & Executive summary ................................................................................. 5
3 Regulatory and Approval Matters ............................................................................. 14
4 Evaluation of the Merits of the Transaction ............................................................. 19
5 Evaluation of the Fairness of the Transaction ......................................................... 38
6 Profile of Ascension Capital Limited ........................................................................ 42
7 Profile and Valuation of AGE Limited ....................................................................... 48
8 Profile and Valuation of Send Global Limited .......................................................... 56
9 Profile and Valuation of Being Consultants Limited ................................................ 66
10 Reasonableness of the Share Issue Price ................................................................ 73
11 Sources of Information, Reliance on Information, Disclaimer and Indemnity ....... 76
12 Qualifications and Expertise, Independence, Declarations and Consents ............ 78
13 Appendix 1 – Send Global Limited: Comparable Companies Transaction Multiples
80
14 Appendix 2 – Send Global Limited: Comparable Companies Trading Multiples ... 82
15 Appendix 3 - AGE Limited: Comparable Companies Financial Information &
Trading Multiples .............................................................................................................. 86
3
1 Glossary and Defined Terms
In this Report the following terms have the following meanings (unless otherwise specified).
Except where indicated otherwise all $ references are to New Zealand dollars.
ACE or the Company Ascension Capital Limited
Acquisition Allotment(s) Each of, and collectively, the AGE Allotment, BCL Allotment, Joyce
Allotment and Send Allotment
Act The Companies Act 1993
AGE AGE Limited
AGE Allotment The allotment of 270 million new Shares to 2061 and 250 million new
Shares to Te Turanga Ukaipo as consideration for the purchase of
86.7% of AGE
AI Artificial Intelligence
Allsop-Smith Katherine Allsop-Smith
Armillary Armillary Limited
BCL Being Consultants Limited
BCL Allotment The allotment of 200 million new Shares at Completion to 2384 as
consideration for the purchase of BCL (and the potential future issue of
Earn-In Shares in relation to the Contingent Consideration for BCL)
Being AI / BAI Being AI Limited (the name that ACE will adopt from the Completion
Date) and the NZX ticker code for Being AI
Board The board of directors of ACE
Business Acquisition(s) The acquisition(s) of AGE, Send, and BCL
CapIQ S&P Capital IQ financial database
Christian Evan Christian
Code The Takeovers Code
Completion and Completion Date The date on which the Transaction is implemented. Expected to be on,
or around, 28 March 2024
Contingent Consideration An adjustment to the price paid to 2384 for the purchase of BCL linked
to the future share price performance of ACE
DCF Discounted cash flow valuation
Debt Capitalisations Each of the Excalibur Debt Capitalisation and the Directors’ Fees
Capitalisation
Directors’ Fees Capitalisation The capitalisation of unpaid directors’ fees (via the issue of new
Shares)
Directors’ Fees Capitalisation
Shares
15.8 million new Shares issued to capitalise $395,000 of accrued, but
unpaid, directors’ fees
Earn-In Shares Any new Shares (up to a maximum of 1,399,992,000) issued to 2384
pursuant to the Contingent Consideration
EAT Exponentially Accelerating Technologies
EBITDA Earnings before interest, tax, depreciation and amortisation
Employee Option Grant The issue of up to 132 million options to buy new Shares to employees,
contractors and non-executive directors
ESOP Options Options to purchase new Shares issued in the Employee Option Grant
EV Enterprise Value is the total value of a business irrespective of how it is
funded. EV is the sum of the market value of the equity of a company
plus the value of debt minus the amount of cash.
Excalibur Excalibur Capital Partners Limited
Excalibur Debt Capitalisation The capitalisation of advances from Excalibur (via the issue of new
Shares)
Excalibur Debt Capitalisations
Shares
30.72 million new Shares issued to Excalibur to capitalise $768,000 of
advances
Filecorp Filecorp NZ Limited, a 100% owned operating subsidiary of Send
FMCA Financial Markets Conduct Act 2013
FME Future maintainable earnings (an estimate of the ‘normal’ or average
level of earnings on a forward looking basis)
Guidance Note NZX Guidance Note “Backdoor and Reverse Listing Transactions”
dated 10 December 2020
Independent ACE Shareholders All of ACE’s current shareholders excluding any of the Company’s
directors
Independent Directors Those directors of ACE who are not, and not associated with, a
relevant associated person in respect of the Transaction.
IPO Initial Public Offering
4
Joyce Sean Joyce, non-executive director and shareholder of ACE and 100%
owner of Excalibur
Joyce Allotment The issue of 80.0 million new Shares to Joyce as consideration for the
purchase of 13.3% of AGE
Listing Rules The NZX Listing Rules
LTM Last 12 Months i.e. LTM revenue is revenue for the most recent 12
month historic period
McDonald David McDonald
NAV Net asset value
Notice of Special Meeting The notice of the Special Meeting as sent to shareholders
NTA Net tangible assets
NZ Mail New Zealand Mail Limited, a 100% owned operating subsidiary of
Send
NZX NZX Limited
Placement Proposed issue of up to 120 million new Shares in ACE
Placement Shares and Placement
shareholders
Any new Shares, and the holders of the new Shares, issued pursuant
to the Placement
Post Completion Shares Up to 280 million new Shares to be issued in the year after Completion,
approval for which will be sought at the Special Meeting
Profile The Listing Profile provided to ACE shareholders in respect of the
Transaction (as sent with the Notice of Special Meeting)
Report This combined Independent Adviser’s Report (in accordance with the
Code) and Appraisal Report (in accordance with the Listing Rules)
RTO Reverse takeover transaction
RTO Agreement The agreement, dated 9 December 2023, between ACE, 2061 and
BCL covering all details of the Transaction
SDL Solution Dynamics Limited, an NZX listed company operating in
broadly similar industry segments to Send
Send Send Global Limited
Send Allotment The allotment of 1,000 million new Shares to 2061 as consideration for
the purchase of 100% of Send
Shares Fully paid ordinary shares in ACE, including both currently existing fully
paid ordinary shares and any other new fully paid ordinary shares to be
issued as part of, or following, the Transaction
Share Issue Price $0.025 (the price at which all new Shares are being issued as part of
the Transaction)
Special Meeting The Special Meeting of shareholders pursuant to the Notice of Special
Meeting to be held on 28 March 2024 to consider the Transaction
Resolutions (along with an additional resolution to change the auditor
of the Company)
Te Turanga Ukaipo Te Turanga Ukaipo Charitable Trust, an education focused charitable
foundation for the Christian family (i.e. Christian and Allsop-Smith)
Transaction The combined transactions, as announced to NZX on 11 December
2023, of the proposed Business Acquisitions, the Debt Capitalisations,
the Placement and the Employee Option Grant (and any other matters
needed to affect these transactions)
Transaction Resolutions The 12 conditional resolutions (resolutions numbered 1 to 12) covering
the Transaction, to be voted on at the Special Meeting
Vendors 2061 and 2384
van Wijk J van Wijk, a former director of ACE
VWAP Volume Weighted Average Price (of share trading over a specific
period on the NZX Main Board)
YTD The “year to date” period within the current financial year
2061 2061 LP, a Limited Partnership representing interests of Allsop-Smith
and Christian
2384 2384 LP, a Limited Partnership representing interests of McDonald
5
2 Overview & Executive summary
2.1 Background
Ascension Capital Limited (“ACE” or the “Company”) is a New Zealand incorporated
investment holding company. ACE’s most recent financial results, for the interim period
ending 30 September 2023, disclosed a net loss for the six month period of $86,000 and as
at 30 September 2023 Total Assets of $38,000 and Total Equity of negative $819,000.
ACE’s fully paid ordinary shares (“Shares”) are listed on the NZX Main Board financial
product market operated by NZX Limited (“NZX”). Based on the last traded price of $0.015
per Share on 11 December 2023, the date at which the Shares were suspended from
trading, ACE had a market capitalisation of approximately $0.32 million.
ACE currently has no trading operations and has been actively investigating opportunities to
acquire one or more existing business operations via a Reverse Takeover Transaction
(“RTO”).
Further information on the Company is set out in section 6.
2.2 Proposed RTO and Associated Transactions
On 11 December 2023 ACE announced that it proposed to undertake a significant
operational and capital restructure comprising the acquisition of several businesses,
capitalisation of debts and an additional capital raising (collectively the “Transaction”). Each
of the elements of the Transaction are detailed in an agreement that ACE entered into on 9
December 2023, namely a Reverse Listing Agreement in Respect of Send Global Limited,
AGE Limited, Being Consultants Limited and Ascension Capital Limited (“RTO Agreement”).
Under the Transaction it is proposed that ACE:
− Purchases 100% of the share capital of:
o AGE Limited (“AGE”)
o Send Global Limited (“Send”)
o Being Consultants Limited (“BCL”)
each a “Business Acquisition” and collectively the “Business Acquisitions”.
− Capitalises existing debts:
o $768,000 of advances (see 6.6.1) from Excalibur Capital Partners Limited
(“Excalibur”) will be capitalised into new Shares (“Excalibur Debt
Capitalisation”)
o The Company will issue 15.8 million new Shares to the current directors, and
one former director, of the Company in full satisfaction of accrued, and
unpaid, directors’ fees (“Directors’ Fees Capitalisation”)
collectively the “Debt Capitalisations”.
− Raises $3.0 million of capital via the issue of new Shares (“Placement”).
6
− Issues up to 132 million options to buy new Shares (“ESOP Options”) to employees,
contractors and non-executive directors of ACE and its subsidiary companies
(“Employee Option Grant”).
The other parties to the RTO Agreement are:
− 2061 LP (“2061”), a Limited Partnership representing interests associated with
Katherine Allsop-Smith (“Allsop-Smith”) and Evan Christian (“Christian”), which
owns 100% of Send and 86.7% of AGE.
− David McDonald (“McDonald”), a tech entrepreneur who has strong credentials in
Artificial Intelligence (“AI”) / Exponentially Accelerating Technologies (“EAT”), who is
the sole shareholder of BCL. Following signing of the RTO Agreement, and in
accordance with the terms of the RTO Agreement, McDonald novated his interests
in that agreement to 2384 LP (“2384”) which is a newly formed Limited Partnership
representing his interests.
2061 and 2384 are collectively the “Vendors”.
The remaining 13.3% of AGE is owned by Sean Joyce
1
(“Joyce”) who is a non-executive
director of the Company and 100% owner of Excalibur (ACE’s second largest shareholder,
holding 10.87% of the Shares). Although he is not a party to the RTO Agreement Joyce will
sell his AGE shares to ACE as part of the Transaction.
While not a shareholder of AGE, nor a party to the RTO Agreement, Te Turanga Ukaipo
Charitable Foundation (“Te Turanga Ukaipo”), which is an education focused charitable
foundation associated with Allsop-Smith and Christian, will be nominated by 2061 LP as an
allottee of some of the Shares that 2061 receives as consideration for selling its
shareholding in AGE.
As well as shareholder and other regulatory approvals each element of the Transaction is
effectively conditional on all of the other elements being completed (or, in the case of the
Placement, authorised) at the same time.
2.2.1 Special Meeting of Shareholders
ACE is holding a Special Meeting of shareholders on 28 March 2024 (“Special Meeting”) to
vote on a series of resolutions in relation to the Transaction.
As part of the Special Meeting there is the requirement for an Independent Adviser’s Report
on the “merits” of the Proposed Transactions in accordance with the Takeovers Code
(“Code”) and an Independent Appraisal Report on the “fairness” of the Proposed
Transactions in accordance with the NZX Listing Rules (“Listing Rules”) which together
forms this report (“Report”). Armillary Limited (“Armillary”) has been engaged by Ascension
to prepare the Report.
Full details of the Special Meeting will be in the Notice of Special Meeting (“Notice of
Special Meeting”) that will be sent to shareholders along with the Report and a Listing
Profile on the Transaction (“Profile”) prior to the Special Meeting.
1
2061 LP is currently the registered owner of Joyce’s shares in AGE (which are being held on trust for Excalibur).
7
ACE expects that the Transaction will be completed (“Completion”) on or around 28 March
2024 (“Completion Date”).
2.2.2 The Business Acquisitions
The collective purchase price for the three Business Acquisitions is a total of $45 million to
be paid at Completion, together with a future adjustment of the purchase price of BCL,
linked to the future share price performance of ACE, of up to a maximum of $35 million.
The operations of each of the three Business Acquisitions can briefly be described as
follows:
− AGE operates an innovative school in Takapuna, Auckland for children from years 1
to 13. It has been operating since 2018 and currently has a roll in the order of 100
learners.
− Send, which was previously known as the G3 Group, owns and operates various
mail, filing and logistics businesses.
− BCL is an early stage AI consulting business with an associated Ventures arm (to
focus on venture investment and to act as a transformation accelerator) and Labs
function (to serve as the R&D engine to advance AI technologies).
A profile of the each of the businesses being acquired is set out in sections 7, 8, and 9.
Each element of the total consideration is to be satisfied by the issue of new Shares at an
issue price of $0.025 per share (“Share Issue Price”). The price, and method of payment,
for each Business Acquisition is:
− AGE: $15.0 million to be satisfied via the issue of 600 million new Shares with 270
million new Shares allotted to 2061 and 250 million new Shares to Te Turanga
Ukaipo (the combined total of 520 million new Shares is collectively the “AGE
Allotment”) and 80.0 million new Shares to Joyce (“Joyce Allotment”)
Joyce acquired 13.3% of AGE from 2061 after the announcement of the Transaction
on 11 December 2023 for a cost of $2.0 million (equivalent to $15.0 million for 100%).
Send advanced Joyce the funds to purchase the shares on the basis of a 5-year,
secured, interest free loan.
− Send: $25.0 million to be satisfied via the issue of 1,000 million new Shares to 2061
(“Send Allotment”)
− BCL: $5.0m to be satisfied via the issue of 200 million new Shares to 2384 (“BCL
Allotment”). There are provisions in the RTO Agreement for an adjustment to the
BCL purchase price (“Contingent Consideration”), linked to the future share price
of ACE, to be satisfied via the issue of additional new Shares to 2384. The
provisions are complex but in summary the BCL purchase price could be increased
by up to $35.0 million, to a total of $40.0 million, via the issue of up to additional
1,399,992,000 new Shares (“Earn-In Shares”). For the maximum number of Shares
to be issued the future ACE share price would need to be at least $0.15 per Share,
or 6x the Share Issue Price, within three years from the Completion Date. Further
details of the Contingent Consideration are in section 9.8.
(each an “Acquisition Allotment” and collectively the “Acquisition Allotments”).
8
2.2.3 Excalibur Debt Capitalisation
Excalibur is ACE’s second largest shareholder, holding 10.87% of the Shares. Excalibur is
100% owned by Joyce who is a non-executive director of the Company.
Since late 2021 Excalibur has been the primary provider of funds to ACE with a current
principal balance outstanding of circa $500,000. Excalibur has agreed to fund the costs
associated with the Transaction so at the Completion Date the amount owing to Excalibur is
expected to be circa $768,000. See section 6.6.1 for additional information.
As part of the Transaction $768,000 of this debt will be capitalised into 30.720 million new
Shares (“Excalibur Debt Capitalisation Shares”) at an issue price of $0.025 per Share.
20.06 million of the Excalibur Debt Capitalisation Shares will be allotted to third parties and
be subject to a six month embargo on transfer. For the purposes of this Report, we have
classified these third parties as associates of Joyce (as that term is defined in the Code)
and considered them part of one holding i.e. Joyce and associates.
2.2.4 Directors’ Fees Capitalisation
ACE currently has four directors, including Joyce, and total directors’ fees of $80,000 per
annum. Given the constrained financial position of the Company no fees have been paid for
several years with the directors agreeing to forego payment until such time as the Company
has sufficient funds to make such payments. The amount outstanding at 31 March 2023
was $270,000, at 30 September 2023 it had increased to $310,000, and by the Completion
Date it is expected to be $350,000. In addition, $45,000 of accrued directors’ fees remain
payable to former director J van Wijk (“van Wijk”), who resigned as a director in 2020.
The current and former directors have collectively agreed, subject to shareholder approval,
to have the amounts owing to them satisfied via the issue of up to 15.8 million new Shares
at an issue price of $0.025 per Share (“Directors’ Fees Capitalisation Shares”).
At Completion Joyce will be owed $75,000 of the total of $395,000 meaning he will receive
3.0 million of the Directors’ Fees Capitalisation Shares.
2.2.5 Placement
ACE may undertake a capital raising to help fund the growth of the Company, in particular
BCL. If undertaken ACE would look to raise $3.0 million through the issue of up to 120.0
million new Shares (“Placement Shares”) at an issue price of not less than $0.025 per
Share to investors (“Placement shareholders”). The Placement would only proceed if the
Transaction occurs.
Shareholder approval of the resolution authorising the Placement is a necessary
precondition for the Transaction to proceed however completion of the Placement is not a
precondition for Completion. However, our analysis of the impact of the Transaction
assumes that the Placement is completed.
2.3 Overall Impact
There are a lot of individual elements of the Transaction which collectively will have a
material impact on the Company. The Transaction will see ACE’s operations transformed into
a diversified AI services, development and investment business along with the ownership of
two existing operating businesses. These businesses are proposed to be enhanced through
9
the introduction of a combination of AI / EAT solutions along with more traditional growth
strategies and initiatives.
The Transaction will result in:
− AGE and Send being wholly owned subsidiaries of ACE, and
− BCL, and its two wholly owned subsidiary companies (Being Ventures Limited and
Being Labs Limited), being a wholly owned subsidiary of ACE.
Following completion of the Transaction ACE plans to change its name to Being AI Limited
(“Being AI” or “BAI”) and its NZX ticker code will change to BAI
2
.
Post Completion the board of ACE will consist of five directors:
− two founders of the various Being AI businesses, namely McDonald and Allsopp-
Smith (alternate Christian)
− Joyce (who will be an Executive Chair)
− Roger Gower, an existing independent director will remain on the board, and
− a new independent director, Joe Jensen who will be appointed following Completion.
The Acquisition Allotments, the Debt Capitalisations, the Placement and the Employee
Option Grant will each see additional new Shares (or options to buy new Shares) issued and
all (except the Excalibur Debt Capitalisation) will bring new shareholders into ACE. These
Share issues will result in the shareholdings of the Company’s current independent
shareholders (i.e. all current shareholders excluding van Wijk and any of the Company’s
directors or “Independent ACE Shareholders”) being significantly diluted (see section 2.4).
2
For simplicity, and ease of reference, we refer to the Company throughout as ACE, whether it is pre-Completion or post-
Completion (at which point it would be referred to as BAI).
10
2.4 Impact on shareholding levels
ACE currently has 21.5 million Shares on issue with 16.9 million (78.4%) of those held by the
Independent ACE Shareholders with the balance held by directors and van Wijk. As shown
in the following table the effect of the Transaction is to increase the total number of Shares,
including the ESOP Options but excluding any Earn-In Shares, to 2,120 million.
Following the Transaction, and assuming no other changes (in particular no allowance for
the potential issue of any Earn-In Shares), the key shareholding blocs (with the % holdings
shown excluding the impact of the ESOP Options) would be:
− Independent ACE Shareholders down from 78.4% to 0.85% (a dilution factor of
98.9%)
− Joyce and associates holding 5.8% (Joyce individually will hold 96.0 million Shares
or 4.83% of the issued Shares and 4.53% of the diluted Shares)
− Other directors and van Wijk collectively holding 0.8%
− Placement shareholders at 6.0%
− 2061, the largest single shareholder, at 63.9% with Te Turanga Ukaipo (an
associate of 2061) holding 12.6%, and
− 2384 at 10.1%.
ACE Shareholding Levels
(millions) Current
The
Transaction
Post Completion Date
Number %
Issued
Shares %
Fully
Diluted %
Independent
ACE
Shareholders
16.86 78.40% - 16.86 0.85% 16.86 0.80%
Joyce and
associates
2.34 10.9% 113.72 116.06 5.8% 116.06 5.5%
Other (incl.
former)
Directors
2.31 10.7% 12.80 15.11 0.8% 15.11 0.7%
Placement
Shareholders
- 0.0% 120.00 120.00 6.0% 120.00 5.7%
2061 LP - 0.0% 1,270.00 1,270.00 63.9% 1,270.00 59.9%
Te Turanga
Ukaipo
- 0.0% 250.00 250.00 12.6% 250.00 11.8%
2384 LP - 0.0% 200.00 200.00 10.1% 200.00 9.4%
ESOP Options - 0.0% 132.00 - 0.0% 132.00 6.2%
Total
21.50 100.0% 2,098.52 1,988.02 100.0% 2,120.02 100.0%
The table on the next page shows the respective impact of each element of the Transaction
on the post Completion shareholding levels.
11
Impact of each Share issuance on post Completion shareholding levels
Number
(million)
% of
Issued
Shares
% of
Fully
Diluted
Comment
Current shares on issue
: Independent ACE
Shareholders
16.86 0.85% 0.80%
: Joyce / Excalibur
2.34 0.12% 0.11%
: Other (incl. former
directors)
2.31 0.12% 0.11%
AGE Allotment
: to 2061
270.00 13.58% 12.74%
: to Te Turanga Ukaipo
250.00 12.58% 11.79%
Joyce Allotment
80.00 4.02% 3.77%
for the purchase of 13.3% of
AGE
Send Allotment
1,000.00 50.30% 47.17%
issued to 2061
BCL Allotment
200.00 10.06% 9.43%
issued to 2384
Excalibur Debt
Capitalisation
30.72 1.55% 1.45%
Directors Fees
Capitalisation
: to Joyce / Excalibur
3.00 0.15% 0.14%
: to all others
12.80 0.64% 0.60%
Placement
120.00 6.04% 5.66%
Total Issued Shares
1,988.019 100.00% 93.77%
ESOP Options
132.00
6.23%
Total Diluted Shares on
issue
2,120.02 100.00%
Section 9.8 details the potential impact of the Contingent Consideration and the issue of
Earn-In Shares to 2384 on these shareholding percentages.
2.5 Summary of opinion
Takeovers Code
Our evaluation of the merits of the Acquisition Allotments, as required under the Code, is
presented in section 4. In brief summary, in our opinion the key positive aspects are:
• The rationale for the Transaction is sound. ACE has explicitly stated it is looking for
RTO opportunities and believes that Being AI is an attractive opportunity.
Implementing the Transaction achieves the Board’s objective of using the ACE listed
shell for a backdoor listing of a meaningful business.
• In reverse, the outlook for ACE without the Transaction is uncertain. It has minimal
cash, negative equity and no income generating assets. If the status quo were to
remain ACE would need to secure additional funding to ensure it could pay its debts
12
as they fall due. That funding may not be available or may only be available on
unfavourable terms.
• The prices being paid for AGE and Send are reasonable (albeit at the top end of our
assessed value range). More importantly, the relative percentages of the enlarged
share capital that are owned by the Independent ACE Shareholders and the Vendors
are reasonable.
• The Debt Capitalisations see almost all of ACE’s existing debts and other liabilities
capitalised into Shares.
• The Transaction materially improves ACE’s financial position and provides it with a
platform, and financial flexibility, to grow in a large and rapidly growing sector.
In our opinion, the key negative aspects are:
• Independent ACE Shareholders will be significantly diluted from 78.4% to 0.85% of
the issued capital (a dilution factor of 98.9%).
• While the Contingent Consideration for BCL is based on increases in shareholder
wealth in our opinion it is too high in proportion to the potential value accretion.
• The Vendors individually, and collectively, will be the largest shareholders in ACE
and will be able to exercise a significant level of control over ACE.
• As ACE transforms itself from a listed shell company to a diversified AI services,
development and investment company its risk profile will change materially.
In our opinion, having regard to the interests of those shareholders who are eligible to vote
to approve the allotments and taking into account all of the relevant factors, the positive
aspects of the Transaction outweigh the negative aspects.
NZX Listing Rules
Our evaluation of the fairness of the Transaction, as required under the Listing Rules, is
presented in section 5. A brief summary of our evaluation is:
• The terms and conditions of the Business Acquisitions and Acquisition Allotments in
respect of AGE and Send are fair (in particular the prices paid for each of these
businesses is within our assessed value range).
• In respect of the BCL Business Acquisition and Acquisition Allotment we consider the
initial price paid for the business lies within a reasonable valuation range, and the
terms of the RTO Agreement relating to the sale are broadly in line with market
practice, so we find these elements to be fair but we consider that the Contingent
Consideration represents too large a proportion of the potential value accretion to the
Company and accordingly we consider this unfair to the Independent ACE
Shareholders.
• The Acquisition Allotments have a material impact on the ownership and control of
ACE. Immediately after Completion 2061 and its associates have over 75% of the
issued capital. Depending on how many Earn-In Shares are issued to 2384, it and
2061 (and associates), could collectively own around 90% of the issued Shares.
Over time, due to additional new Share issues (e.g. the Post Completion Shares) this
percentage could be expected to reduce thus limiting the degree of control that 2061
13
(and its associates) and 2384 (and its associates) have on ACE. Noting too the
constraints on this control contained within the Listing Rules, the Act, the Code and
Company’s Constitution we do not consider this level of ownership and control to be
unfair to the Independent ACE Shareholders.
• Weighing up the relative importance of each of the Business Acquisitions, the ratio of
the Shares held by the Vendors relative to the Shares held by the Independent ACE
Shareholders, the likelihood of the Contingent Consideration being a material factor
in the future and the returns that Independent ACE Shareholder would have before it
does become a material factor, we consider that overall the Business Acquisitions
and Acquisition Allotments are fair to the Independent ACE Shareholders.
In our opinion, after giving due regard to all of the relevant factors, while we consider that
there are individual components of the Transaction that we do not consider fair, when viewed
as a whole we consider that the terms and conditions of the Transaction are fair to the
Independent ACE Shareholders.
14
3 Regulatory and Approval Matters
3.1 Special meeting of shareholders
Shareholders, subject to their eligibility, will vote at the Special Meeting on 28 March 2024 on
a total of 14 resolutions to give full effect to the Transaction although resolutions 13
(amendment to constitution) and 14 (appointment of auditor) are separate to the extent that
they are not dependent on the other 12 being approved. Resolutions 1 to 12 (“Transaction
Resolutions”) are all linked in that implementation of each of them is conditional on all 12 of
the Transaction Resolutions being approved.
Full details of the Transaction Resolutions will be contained in the Notice of Special Meeting:
1. Acquisition of 100% of the shares on issue in Being Consultants Limited, AGE
Limited and Send Global Limited (the three initial constituents of the Being AI Group)
– Special Resolution – Listing Rules 4.14.1, 5.1.1 and 5.2.1, and Section 129 of the
Companies Act 1993
2. Issue of 1,800,000,000 ordinary fully paid shares to the shareholders of the Being AI
Group (the Acquisition Allotment Shares) – Ordinary Resolution – Listing Rules 4.1.1
and 5.2.1, and Rule 7(d) of the Takeovers Code
3. Issue of up to 1,399,992,000 additional ordinary fully paid shares to the shareholders
of Being Consultants Limited (the Earn-In Shares) – Ordinary Resolution – Listing
Rule 4.1.1 and Rule 7(d) of the Takeovers Code
4. Authorise the issue of up to 120,000,000 new ordinary fully paid shares to wholesale
investors (the Placement Shares) – Ordinary Resolution – Listing Rule 4.1.1
5. Issue of 30,720,000 new ordinary fully paid shares to Excalibur Capital Partners
Limited (the Excalibur Debt Capitalisation Shares) – Ordinary Resolution – Listing
Rules 4.1.1 and 5.2.1
6. Issue of 15,800,000 new ordinary fully paid shares to all existing ACE Directors and
one former ACE director (the Directors’ Fees Capitalisation Shares) – Ordinary
Resolution – Listing Rule 4.2.1 and 5.2.1
7. Appointment of David McDonald as Director – Ordinary Resolution
8. Appointment of Katherine Allsopp-Smith as Director – Ordinary Resolution
9. Appointment of Joe Jensen as Director – Ordinary Resolution
10. Approval of Directors’ Fees (authorising the maximum pool of directors’ fees to be
increased from $80,000 p.a. to $300,000 p.a.) – Ordinary Resolution
11. Authorise the issue of up to 132,000,000 Options to Employees, Contractors, and
Non-executive Directors (the ESOP Options) - Ordinary Resolution – Listing Rule
4.2.1
15
12. Authorise the issue of up to 280,000,000 new ordinary fully paid shares to third
parties (“Post Completion Shares”
3
) – Ordinary Resolution – Listing Rule 4.2.1
13. Revocation of existing constitution and adoption of new constitution (amendments
required to comply with the current version of the Listing Rules) – Special Resolution
14. Appointment of William Buck as auditor and authorisation of the Board to fix the
auditor’s remuneration – Ordinary Resolution
Transaction Resolutions 1 to 12 are linked in that implementation of each resolution is
conditional on each of the other 11 resolutions also being approved.
Resolutions 13 (amendments to constitution) and 14 (appointment of auditor) are not
conditional upon all of resolutions 1 to 12 being approved and will be put to the meeting
regardless of the outcome of the Transaction Resolutions.
Resolution 1 and 13 are special resolutions (requiring a majority of 75% of the eligible votes
cast on the resolution in person or by proxy) while Resolutions 2 – 12 and 14 are ordinary
resolutions (requiring a simple majority of the eligible votes cast on the resolution in person
or by proxy).
If all 12 Transaction Resolutions are passed, any shareholder that has cast all of their votes
against resolution 1 is entitled to require Ascension to purchase their shares in accordance
with section 110 of the Companies Act 1993 (“Act”). Further details on these minority buy-
out provisions are included in the Notice of Special Meeting and section 4.2.15.
3.1.1 Voting restrictions
In accordance with the Code and the Listing Rules there are several provisions which limit
the ability of some shareholders to vote on certain resolutions.
− Any shareholders of the Company, and their Associated Persons (as that term is
defined in the Listing Rules), who are to receive any of the Shares, as referred to in
resolutions 2, 3, 4, 5, 6, 11 or 12, are not entitled to vote in respect of those
resolutions.
− The shareholders of the Being AI Group of Companies and any associates (as that
term is defined in the Code) of those persons who are to receive any of the Shares
referred to in resolution 2 or 3 are not entitled to vote in respect of that resolution in
accordance with Rule 17(2) of the Code.
− No director of the Company, or their Associated Persons are entitled to vote on
resolution 6 or 10 by virtue of Listing Rule 6.3. Those persons are restricted from
acting as discretionary proxies although they can act as a non-discretionary proxy.
− Excalibur Capital Partners Limited and its Associated Persons are not entitled to vote
on resolution 2 or 5 by virtue of Listing Rule 6.3. Those persons are restricted from
acting as discretionary proxies although they can act as a non-discretionary proxy.
3
Issuance of the Post Completion Shares does not directly form part of the Transaction, and these Shares are not included in
our analysis of the impact of the Transaction on shareholding levels. However, we understand that this resolution is included in
the Notice of Special Meeting to provide the directors with the flexibility to raise further capital (280 million new Shares at the
minimum allowable issue price of $0.025 would raise $7.0 million).
16
3.2 Regulatory requirements
3.2.1 NZX Listing Rules
Business Acquisitions and Acquisition Allotments
Listing Rule 5.1.1 states that an Issuer must not enter into any transaction, or a related
series of transactions, to acquire, sell, lease, exchange, or otherwise dispose of assets
where the transaction, or related series of transactions,
− would significantly change, either directly or indirectly, the nature of the Issuer’s
business, or
− involves a Gross Value (as defined in the Listing Rules) above 50% of the Average
Market Capitalisation (as defined in the Listing Rules) of the Issuer.
unless the transaction, or related series of transactions, is approved by an ordinary
resolution (or a special resolution if approval is required by section 129 of the Act).
The Business Acquisitions will significantly change the nature of ACE’s business and have a
Gross Value above 50% of the Company’s Average Market Capitalisation. The Business
Acquisitions are for a value which is more than half the value of the Company’s assets so
are classified by the Act as major transactions (as that term is defined in the Act) so a special
resolution is required.
Listing Rule 4.1.1 requires that the issue of the Allotment Shares, the Earn-In Shares (along
with the Placement Shares and the ESOP Options) be approved by an ordinary resolution of
the existing shareholders of the Company.
Listing Rule 4.14.1 allows an Issuer to buy back and cancel its own shares if that has been
approved by an ordinary resolution of shareholders. This approval is required because if
ACE makes a warranty claim under the terms of the RTO Agreement, the relevant Vendor
may elect to satisfy payment of the amount owing to ACE by the sale of some of their Shares
to the Company. Any Shares purchased in this manner would subsequently be cancelled.
Listing Rule 5.2.1 states than an Issuer must not enter into a Material Transaction (as
defined in the Listing Rules) if a Related Party (as defined in the Listing Rules) is, or is likely,
to become a direct party to the Material Transaction, unless that Material Transaction is
approved by an ordinary resolution of non-associated shareholders.
The Business Acquisitions, and Acquisition Allotments, are Material Transactions (a value in
excess of 10% of ACE’s Average Market Capitalisation) and Joyce (a direct party to the
Transaction as the seller of 13.3% of AGE) is a Related Party as he is a director of ACE.
Debt Capitalisations
Listing Rule 4.1.1 requires that the issue of the Directors’ Fees Capitalisation Shares and the
Excalibur Debt Capitalisation Shares be approved by an ordinary resolution of the existing
shareholders of the Company.
Listing Rule 5.2.1 also applies to each of the Excalibur Debt Capitalisation and Directors’
Fees Capitalisation as they are with Related Parties (Excalibur because it holds more than
10% of the Shares and also because its shareholder and director is Joyce, who is also a
director of ACE) and are Material Transactions as they each have a value in excess of 10%
of ACE’s Average Market Capitalisation.
17
Requirement for an Appraisal Report
Listing Rule 7.8.2 states that each notice of meeting must include sufficient explanation,
reports, valuations, and other information, as to enable a reasonable person entitled to vote
to understand the effect of each resolution proposed. The NZX Guidance Note Backdoor
and Reverse Listing Transactions dated 10 December 2020 (“Guidance Note”) states that
“NZX considers that in order to meet this standard [of Listing Rule 7.8.2], a Notice of Meeting
in relation to a backdoor or reverse listing transaction must include an independent appraisal
report prepared in accordance with Rule 7.10.”
Listing Rule 7.8.5 states that a notice of meeting to consider a resolution in respect of the
issue of Financial Products (as defined in the Listing Rules) where more than 50% of the
Financial Products to be issued are intended or likely to be acquired by Directors or
Associated Persons of Directors must be accompanied by an Appraisal Report. The Shares
issued pursuant to the Debt Capitalisations are primarily being issued to directors of the
Company meaning an Appraisal Report is required.
Listing Rule 7.8.8(b) states that any notice of meeting including a resolution required by
Listing Rule 5.2.1 (Material Transaction with a Related Party) must be accompanied by an
Appraisal Report.
Listing Rule 7.10.2 requires an Appraisal Report to state the appraiser’s opinion, with
supporting reasons, as to whether or not the terms and conditions of the proposed
transaction are fair to shareholders not associated with the Issuer or its directors, or with any
parties to the transaction. In this Report that means the Independent ACE Shareholders.
3.2.2 Takeovers Code
ACE’s Shares are listed on the NZX Main Board and as an Issuer the Company is classified
in the Code as a code company.
Rule 6 of the Code, the Fundamental rule, prohibits:
- A person who holds or controls less than 20% of the voting rights in a code company
from increasing its holding or control of voting rights beyond 20%; and
- A person holding or controlling 20% or more of the voting rights in a code company
from increasing its holding or control of voting rights,
unless that person complies with the exceptions to the Fundamental rule.
One of the exceptions, set out in Rule 7(d) of the Code, enables a person to increase their
holding or control of voting rights by an allotment of shares if the allotment is approved by an
ordinary resolution of shareholders of the code company (on which that person, and its
associates, are not entitled to vote).
The Acquisition Allotments will, at the Completion Date, result in 2061 holding or controlling
63.9% of the voting rights of the Company. Te Turanga Ukaipo is an associate of 2061 so the
two parties voting rights need to be considered as one i.e. a combined total of 76.5% of the
voting rights.
2384 will, at Completion Date, hold or control 10.1% of the voting rights of the Company.
However, the future allotment of Earn-In Shares to 2384 as Contingent Consideration could
see it ultimately holding or controlling up to 47.2% of the voting rights of the Company.
18
Therefore, in accordance with the Code, shareholders not associated with 2061 or 2384
4
will
vote at the Special Meeting on ordinary resolutions in respect of the issue of the relevant
Acquisition Allotments and the Earn-In Shares i.e. resolutions 2 and 3.
Rule 18 of the Code requires the directors of a code company to obtain an Independent
Adviser’s Report on the merits of an allotment under Rule 7(d).
Pursuant to Rule 16(h) of the Code the Independent Adviser’s Report is to be included in, or
accompany, the Notice of Special Meeting.
3.3 Purpose of the Report
ACE’s board of directors (“Board”) has engaged Armillary to prepare:
- An Appraisal Report on the fairness of the Transaction in accordance with the
Guidance Note and the Listing Rules. Armillary was approved by NZ RegCo on 13
December 2023 to prepare the Appraisal Report.
- An Independent Adviser’s Report on the merits of the Acquisition Allotments in
accordance with Rule 18 of the Code. Armillary was approved by the Takeovers
Panel on 13 December 2023 to prepare the Independent Adviser’s Report.
Collectively these form the Report.
Armillary issues this Report to those directors of the Board who are not, and are not
associated with, a relevant Associated Person (“Independent Directors”) for the benefit of
the Independent ACE Shareholders to assist them in forming their own opinion on whether
(subject to any voting restrictions which may apply to them) to vote for or against the
Transaction Resolutions at the Special Meeting on 28 March 2024.
We note that each shareholder’s circumstances and objectives are different. Accordingly, it is
not possible to report on the merits and fairness of the Transaction in relation to each
individual shareholder. This Report, on the merits and fairness of the Transaction, is
therefore necessarily general in nature.
This Report is not to be used for any other purpose without our prior written consent.
3.4 Listing profile
Listing Rule 7.3.1(b)(iii) requires ACE to provide a listing profile in relation to the Business
Acquisitions. The Profile contains information on each of the companies in the Transaction
and accompanies the Notice of Special Meeting that ACE will provide to shareholders.
The Profile discloses particulars of the businesses of AGE, Send and BCL as if the
Transaction is approved. It also provides financial information in respect of the businesses
being acquired pursuant to the Transaction and identifies key risk factors associated with the
Transaction and its constituent businesses.
This Report should be read in conjunction with the Profile.
4
As stated in the Notice of Special Meeting, to the best of ACE’s knowledge the only existing ACE shareholder that is restricted
from voting on Resolution 2 by virtue of the Takeovers Code is Excalibur.
19
4 Evaluation of the Merits of the Transaction
4.1 Basis of evaluation
Rule 18 of the Code requires an evaluation of the merits of the Acquisition Allotments to
2061, Te Turanga Ukaipo and 2384 with regards to the interests of the Independent ACE
Shareholders.
There is no legal definition of the term “merits” in New Zealand in either the Code or in any
statute dealing with securities or commercial law. In the absence of an explicit definition of
merits, guidance can be taken from:
− the Takeovers Panel Guidance Note on Independent Advisers and the Takeovers
Code dated 1 November 2023
− definitions designed to address similar issues within New Zealand regulations which
are relevant to the Transaction
− overseas precedents, and
− the ordinary meaning of the term “merits”.
The Transaction (other than completing the Placement) is conditional upon the Acquisition
Allotments and vice versa. As such to assess the merits of the Acquisition Allotments we
must also assess the merits of the other components of the Transaction.
In our opinion, an assessment of the merits of the Acquisition Allotments and the Transaction
as a whole, should consider:
− the rationale for the Transaction
− the process undertaken by ACE in formulating the Transaction
− the terms and conditions of the Transaction
− the impact of the Transaction on the ownership and control of ACE
− the impact of the Transaction on ACE’s financial position
− the impact of the Transaction on ACE’s financial prospects and risk profile
− the impact on ACE’s share price and liquidity
− the benefits and disadvantages to the key parties in the Transaction
− alternatives to the Transaction
− the likelihood of the Transaction Resolutions being approved
− the implications of the Transaction Resolutions not being approved, and
− options for shareholders who do not want to retain their investment.
20
Our opinion should be considered as a whole. Selecting only portions, without considering all
of the factors and analysis together, could create a misleading view of the factors and
process underlying the opinion.
4.2 Summary of the evaluation of the merits of the Acquisition Allotments and the
Transaction
Our evaluation of the merits of the Acquisition Allotments, and the Transaction, is set out, in
detail, in sections 4.2.1 to 4.2.15.
In summary the positive aspects are:
− The rationale for the Transaction is sound. ACE has explicitly stated it is looking for
RTO opportunities and believes that, in Being AI, it has found an attractive
opportunity. Implementing the Transaction achieves the Board’s stated objective of
using the ACE listed shell for a backdoor listing of a meaningful business.
− The process that ACE has undertaken to formulate the Transaction is sound.
− We consider the prices being paid for AGE and Send to be reasonable (albeit at the
top end of our assessed value ranges). More importantly, the relative percentages of
the enlarged share capital that are owned by the Independent ACE Shareholders and
the Vendors are reasonable. In our opinion, this is one of the key factors that
Independent ACE Shareholders should consider when assessing their voting
intentions.
− The Debt Capitalisations see almost all of ACE’s existing debts and other liabilities
capitalised into Shares at the same Share Issue Price as other elements of the
Transaction. This would see the Company with no debt at the parent company level
and, if the Placement is completed, sufficient cash reserves to start implementing the
Being AI growth initiatives.
− The terms of the Employee Option Grant are broadly in line with market practice and
having key executives owning ESOP Options will help align interests between
management and external shareholders.
− The Transaction materially improves ACE’s financial position.
− Operating in a large and rapidly growing sector, with a flexible business model and a
mandate to grow, means ACE will have fewer constraints, and many more
opportunities to grow, than it currently has.
− With more freely tradeable shares on issue once the Placement is completed, and a
higher profile, we would expect that liquidity of the Shares will improve.
− ACE currently has minimal cash, negative equity and no income generating assets. If
the Transaction Resolutions are not approved, and the status quo remains, the
Company would need to secure additional funding to ensure it could pay its debts as
they fall due. That funding may not be available or may be on less advantageous
terms than the current unsecured funding from Excalibur. Independent ACE
Shareholders would, at best, face dilution of their current holdings and subsequent
returns to, at worst, liquidation of the Company (and in that scenario they would,
most likely, receive no return at all).
21
In summary, the negative aspects are:
− While we consider the initial purchase price for BCL to be reasonable our view is that
the Contingent Consideration for BCL is too high in proportion of the potential value
accretion. Accordingly, we consider the Contingent Consideration to not be fair to
Independent ACE Shareholders although in the wider context of the Transaction it is
reasonable.
− Independent ACE Shareholders’ holding will be significantly diluted from 78.4% to
0.85% of the issued capital (a dilution factor of 98.9%). Depending on the number of
Earn-In Shares issued to 2384, and the number of ESOP Options that are exercised,
their holding could be diluted to as low as 0.48% (a dilution factor of 99.4%).
− Immediately following Completion Christian and Allsop-Smith will, through their
control of 2061 and Te Turanga Ukaipo, be able to exercise a significant level of
control over ACE and control the outcome of any ordinary or special resolution at a
shareholders meeting. 2061 on its own will be able to control the outcome of ordinary
resolutions and so will have significant control over the composition of the board.
− Over time, depending on the number of Earn-In Shares issued to 2384, 2061 and its
associates’ level of control may fall although 2384 may be able to exercise an
increasing level of control over the Company.
− As ACE transforms itself from a listed shell company to a diversified AI services,
development and investment company its risk profile will change materially and it will
be exposed to a wide range of new risks both within, and outside of, its control.
There are a number of positive and negative features of the Transaction and each
shareholder will place differing levels of emphasis on each of them. In our opinion, having
regard to the interests of those shareholders who are eligible to vote to approve the
allotments and taking into account all of the relevant factors, the positive aspects of
the Transaction outweigh the negative aspects.
4.2.1 Rationale for the Transaction
ACE is a listed shell company listed on the NZX Main Board. It does not currently have any
trading operations or material assets (other than a term deposit in support of its listing). In
order to maximise the value of that listing the focus of the Company has, for several years,
been to identify a suitable business opportunity to invest in and / or acquire through an RTO.
The Company has advised us that while they have been looking for RTO opportunities since
the Company’s restructuring in June 2020 (see section 6.1) the first 18 months or so were
relatively quiet as ACE was internally focused on consolidating and ‘tidying up’ its structure.
at the same time many other companies, that could otherwise have been RTO candidates,
were focused on navigating their way through the various challenges that COVID 19
presented.
Since the start of 2023 however, the general level of business confidence and activity picked
up and ACE has informed us that they were approached by at least 10 parties in relation to
an RTO. These approaches spanned the property, manufacturing, infrastructure and
resources sectors but none was deemed attractive enough to progress further. In the
Board’s opinion the Being AI proposal represents the most attractive opportunity considered
by the Company and it will transform ACE into a diversified AI services, development and
investment company that also owns two established operating businesses.
22
In our opinion, the rationale for the Transaction is sound. The Business Acquisitions achieve
the Board’s objective of using the ACE listed shell for the backdoor listing of a meaningful
business while the Debt Capitalisations and Placement (if it is completed), along with the
potential issue of the Post Completion Shares, should provide the Company with sufficient
financial flexibility to achieve at least its near term objectives.
4.2.2 Process undertaken by ACE
We understand that ACE commenced discussions with Christian and 2061 in respect of the
Transaction in around August 2023, following an approach from Christian. Detailed
discussions were then held between the parties with Joyce the key person representing
ACE.
Christian then introduced McDonald to the Company and negotiations continued.
The parties signed a non-binding indicative terms sheet in October 2023.
A mutual due-diligence process then followed with the ACE team led by Joyce with support
from the other directors. 2061 undertook a due-diligence review of ACE which was led by the
accounting firm BDO
5
.
The Board then negotiated and entered into the RTO Agreement with 2061 and McDonald
on 9 December 2023. This negotiation was completed on an arm’s length basis with each
party separately advised by their own legal counsel.
The Company has informed us that a professional rapport between the parties was
established quickly and that negotiations were conducted in a professional and cordial
manner. That approach to negotiations helps explain how all of these matters could be
concluded within what, in our experience, is a relatively short timeframe.
Subsequent to entering into the RTO Agreement, the NZX announcement and the
suspension of Share trading, Joyce entered into an agreement with 2061 whereby he
purchased 13.3% of AGE for a consideration of $2.0 million (the same pro-rata price as the
Business Acquisition). Send advanced Joyce the $2.0 million to fund the purchase on the
basis of a 5-year, secured, interest free loan.
4.2.3 Terms and conditions of the Transaction
The RTO Agreement details each element of the Transaction which we summarise, with our
assessment of the key terms and conditions, in this section.
Business Acquisitions
The table below the commentary sets out the pricing of each of the Business Acquisitions
alongside Armillary’s valuation assessment.
Commentary:
− The price for AGE sits within the range of our assessed value, albeit at the top end.
Accordingly, our opinion is that the price is fair to the Independent ACE
Shareholders.
5
BDO Wellington are the Company’s current auditors so the work on behalf of 2061 was undertaken by BDO’s Auckland office
(with all appropriate internal approvals obtained and controls implemented).
23
− The price for Send sits within the assessed valuation range, albeit at the top end.
Accordingly, our opinion is that the price is fair to the Independent ACE
Shareholders.
− The initial consideration for BCL is considered fair to the Independent ACE
Shareholders. The Contingent Consideration for BCL is considered to be unfair to the
Independent ACE Shareholders but, in the wider context of the Transaction,
reasonable.
Company Price
Consideration
% of Issued Capital post
Completion
Armillary Valuation Assessment
AGE $15 million
600 million Shares
30.2% of issued capital
Range of $9.8 million to $15.7 million
and a mid-point of $12.8 million (see
section 7.5.6)
Send $25 million
1,000 million Shares
50.3% of issued capital
Range of $22.0 million to $25.6 million
and a mid-point of $23.8 million (see
section 8.6.5)
BCL $5 million
200 million Shares
10.1% of issued capital
Plus, Contingent Consideration of up
to $35 million / c.1,400 million Shares
(see section 9.8 for impact on
ownership)
No formal valuation assessment has
been undertaken (see section 9.7.3)
Purchase Price
No cash is being paid by ACE for the Business Acquisitions as 100% of the consideration is
being satisfied via the issue of new Shares (the Business Acquisition Allotments).
Accordingly, when considering the merits and fairness of the Transaction, particularly when
considering the purchase price of each of the businesses, we consider it appropriate to place
emphasis on the relative percentage holdings of the Independent ACE Shareholders and the
Vendors.
As the Transaction is structured, with total consideration for the three businesses of $45
million and a Share Issue Price of $0.025, the Independent ACE Shareholders end up with
0.85% of the issued share capital (excluding the impact of any Earn-In Shares or the
exercise of any ESOP Options) and the Vendors and Te Turanga Ukaipo collectively own
86.5% i.e. 102.0x as many shares as the Independent ACE Shareholders.
In theory, the Transaction could have been structured differently. We considered two such
scenarios using a Share Issue Price of $0.015 (i.e. the last traded price).
− In the first scenario we assumed the same number of new Shares being issued in the
Acquisition Allotments, the same amount of debt capitalised and the same amount of
new capital raised in the Placement (only these last two components based on the
lower price). In this scenario the headline price for the three businesses would be
AGE $9.0 million, Send $15.0 million and BCL $3.0 million i.e. at, or well below, the
bottom end of assessed valuation ranges and seemingly putting the Independent
24
ACE Shareholders in a more favourable position. The Vendors would collectively still
own 102.0x as many Shares as the Independent ACE Shareholders, however, the
Independent ACE Shareholders would only own 0.80% of the issued share capital
(and the Vendors and Te Turanga Ukaipo combined would own 81.9%) as more new
Shares would have been issued in the Placement and for the Debt Capitalisations.
− In the second scenario we assumed that all components of the Transaction were as
announced except that the Share Issue Price was $0.015. This scenario is the same
as the previous paragraph except more new Shares would be issued in the Business
Allotments (as the prices are assumed to be unchanged on the announced collective
$40.0 million). In this scenario the Vendors and Te Turanga Ukaipo combined would
own 170.1x as many Shares as the Independent ACE Shareholders who would only
hold 0.51% of the issued share capital.
We consider that any assessment of the purchase price for the three businesses needs to
consider the relative percentage holdings of the parties as, in our opinion, this approach
contributes to a fuller picture of the merits of the Transaction.
We also note that, inter alia, the Transaction is conditional upon the issue of new Shares to
the following parties:
− Joyce, pursuant to the Excalibur Debt Capitalisation and the Joyce Allotment (for the
purchase of 13.3% of AGE), and
− Joyce, the other current ACE directors and van Wijk, pursuant to the Directors’ Fees
Capitalisation.
In addition, while the Transaction is not conditional on the Placement, we assume that the
Company will look to complete it. Assuming that is the case the Placement would introduce
new investor shareholders on to the Company’s Share register.
We consider that each of these components, in particular the Placement if it is undertaken,
provides an element of external and / or independent validation that the overall terms of the
Transaction, of which the Business Acquisitions are the pivotal part, are reasonable.
Conditions
Completion of the sale and purchase of each of the three businesses, and issue of the
Acquisition Allotment Shares, is conditional on:
− ACE shareholders approving the Transaction Resolutions
− NZX approvals as required to effect the Transaction
− consent to the proposed transfer of AGE and Send shares from 2061 from:
o each creditor in respect of any general security agreements registered over
AGE or Send (or its subsidiaries)
o each landlord in respect of each deed of lease entered into by either AGE or
Send (or its subsidiaries)
o each counterparty to each material contract entered into by either AGE or
Send (or its subsidiaries)
25
− a letter of offer of employment being issued by ACE to McDonald as Group CEO of
BAI
− no fall in the S&P/NZX 50 or S&P/ASX200 of at least 12.5% from the level of the
close on 8 December 2023
− none of Christian, Allsopp-Smith or McDonald dying or becoming permanently
incapacitated, and
− McDonald being able to novate his interests in the RTO Agreement to a newly
incorporated limited partnership (which he will do, prior to Completion, to 2384).
The date for satisfaction, or waiver, of the conditions is no later than 31 March 2024.
The implications of one, or more, of the conditions not being met depends on the commercial
importance of that condition. If Shareholder or NZX approval is not obtained the Transaction
couldn’t proceed however each of the other conditions are capable of being waived by the
party who benefits from it. The matter of whether to waive any condition (thus enabling the
Transaction to proceed) or not (thus meaning that the Transaction couldn’t proceed as
proposed) is a commercial decision for either the Company, the Vendors or McDonald
(depending on which condition is not met).
In our opinion the conditions of the Transaction, considered in aggregate, are broadly in line
with market practice for transactions of this nature. Accordingly, we consider them to be
reasonable from the point of view of Independent ACE Shareholders.
Warranties & Indemnities
As is standard in business sale agreements each of the parties has given various warranties
and indemnities in support of the information provided in formulating the Transaction.
ACE has provided warranties in respect of its capital structure and corporate authorities,
information provided in due diligence, compliance with laws and regulations and litigation
and legal & regulatory proceedings. ACE has also provided a warranty in respect of its
compliance with all applicable tax obligations and legislation.
ACE has indemnified 2061 and 2384 in respect of its compliance, prior to the Completion
Date, with the Listing Rules, the FMCA, the Code and the Act.
2061 has provided separate warranties in respect of each of AGE and Send. The warranties
cover corporate structure and approvals, information disclosure, accounts, assets, books
and records, statutory compliance, proceedings, employees, intellectual property, contracts,
and taxation.
In respect of BCL, 2384 has given similar warranties to those provided by 2061 for AGE and
Send i.e. they cover corporate structure and authority to transact, information disclosure,
accounts, assets, books and records, statutory compliance, proceedings, employees,
intellectual property, contracts and taxation.
Each party’s liability under the warranties is limited to claims made within 12 months of
Completion and an aggregate amount limited to:
− 50% of the purchase price in respect of AGE and Send (for 2061) and 40% of the
purchase price for BCL (for 2384), and
26
− $1.0 million in respect of ACE.
In our opinion the warranties and indemnities provided in the RTO Agreement, when
considered in aggregate, are broadly in line with market practice for transactions of this
nature. Accordingly, we consider they are not unreasonable from the point of view of the
Independent ACE Shareholders.
Debt Capitalisations
As part of its Completion obligations ACE will undertake two separate debt capitalisations:
− The Excalibur Debt Capitalisation under which an amount of $768,000 owing to
Excalibur (a company 100% owned by Joyce) will be capitalised into 30.72 million
new Shares.
− The Directors’ Fees Capitalisation under which an amount of $395,000 owing to all of
the Company’s directors (including Joyce) and van Wijk will be capitalised into 15.8
million new Shares.
The effect of these transactions is that all of the Company’s current debt, and a longstanding
payable due to the directors (and van Wijk), will be converted into equity. ACE will have no
debt at the parent company level and, reflecting its minimal level of activity, only a small
balance of Trade and Other Payables.
The Debt Capitalisations are being done at the same Share Issue Price ($0.025) as the
other elements of the Transaction and accordingly we consider them fair and reasonable
from the point of view of the Independent ACE Shareholders.
Placement
ACE intends to get shareholder authorisation to subsequently undertake a capital raising to
help fund the growth of the Company, in particular BCL. If these plans progress ACE would
look to raise $3.0 million through the issue of up to 120 million new Shares to investors. Due
to the regulatory framework associated with reverse listing transactions ACE is restricted
from raising new capital via an offer to all existing shareholders, or other members of the
public, in conjunction with the completion of the Transaction.
The Placement would be undertaken at a price not less than the Share Issue Price ($0.025)
for other elements of the Transaction and accordingly we consider it reasonable from the
point of view of the Independent ACE Shareholders.
Whilst the Placement would assist in funding the growth of the Company, in particular BCL,
it would not provide sufficient capital for the Company to fully implement all of its business
strategies.
We note that the Company is also seeking approval for the issue of up to a further 280
million new Shares, at any time in the first year after Completion, at a price of not less than
$0.025 to raise at least $7.0 million. How, or if, this authority is implemented is unknown
however, at this point in time, we consider it reasonable on the basis that the price is no less
than the Share Issue Price and having the authority to issue the Shares would provide the
Company greater flexibility to implement its growth initiatives.
Employee Option Grant
The principal terms of the ESOP Options will be:
27
− the ESOP Options will be issued within 12 months of the Completion Date
− each ESOP Option will entitle the holder to subscribe for one new Share
− the exercise price for each ESOP Option will be not less than $0.025
− the ESOP Options will vest with the holder over a five-year period in five equal
tranches with the first vesting on the first anniversary of the date of their issue
− the ESOP Options must be exercised within five years of the relevant vesting date
− the ESOP Options are not transferable, and
− in the event that the holder leaves the employment of ACE, or any subsidiary, any
unvested ESOP Options would lapse and any vested, but unexercised, ESOP
Options must be exercised within 30 days of the cessation of employment or those
ESOP Options would also lapse.
Depending on the number of Earn-In Shares issued to 2384, and assuming no other Share
issues, the ESOP Options will represent between 3.75% and 6.23% of the fully diluted share
capital.
Although details of the recipients of the ESOP Options has not been finalised the Company
has informed us that McDonald will not be granted any. The Profile notes that the two
independent directors are, over time, expected to receive up to 16 million ESOP Options
although our understanding is that the majority of the ESOP Options are intended to be
issued to employees.
Having key executives owning shares in the business is generally regarded as a positive
feature in that it helps ensure alignment with external shareholders. In the absence of full
details (e.g. the exercise price and the spread of recipients are unknown) we are unable to
undertake a detailed review of the Employee Option Grant, however, our preliminary
assessment is that the terms are broadly in line with market practice and accordingly we do
not consider it to be unreasonable from the point of view of the Independent ACE
Shareholders.
4.2.4 Impact of the Transaction on the ownership and control of ACE
Share Capital and Shareholders
The Company currently has 21,498,828 ordinary shares on issue held by 770 shareholders.
Details of the 10 largest shareholders is shown in section 6.4.1. Upon Completion, the
capital structure will be totally transformed with the Company having circa 1,988 million
issued Shares or including the exercise of the ESOP Options: 2,120 million (see section
2.4).
Dilutionary Impact
The Transaction will see the Independent ACE Shareholders shareholdings being diluted
from 78.4% to 0.85% of the issued capital (including the exercise of the ESOP Options:
0.80%) and, dependent on the number of Earn-In Shares that are issued, their collective
holding could potentially be as low as 0.48%.
28
This is a very significant level of dilution. However, in our view the Independent ACE
Shareholders should place greater focus on the overall value of their shareholdings rather
than the relative percentage ownership level.
As detailed in sections 4.2.3, in conjunction with 10.7, we consider that the prices paid in
each of the Business Acquisitions, and in particular the relative shareholdings of the
Independent ACE Shareholders and the Vendors, to be reasonable from the point of view of
the Independent ACE Shareholders.
Shareholder Voting
Following Completion of the Transaction, 2061 and its associates will be able to exercise a
significant level of control over ACE. 2061’s 63.9% of the Company’s voting rights will enable
it to singlehandedly pass, or block, any ordinary resolution (which require the approval of
more than 50% of the votes cast by shareholders). When combined with Te Turanga
Ukaipo’s 12.6% Christian and his associates will control 76.5% of the voting rights and so
would be able to pass any special resolution (which require the approval of at least 75% of
the votes cast by shareholders) which they’re eligible to vote on.
The combined ability of Christian, Allsop-Smith and their associated parties to exercise this
control will be constrained by legislation and regulation (e.g. the Listing Rules, the Act, the
Code and the Company’s Constitution may make it ineligible to vote on certain resolutions)
however, at least initially, no other shareholding bloc comes close to have any ability to pass,
or block, either ordinary or special resolutions.
2061’s and its associates’ level of control can be expected to reduce over time as the
Company issues more Shares e.g. the Post Completion Shares, the Earn-In Shares and
exercise of the ESOP Options:
− Before considering the Earn-In Shares but assuming all 280 million of the Post
Completion Shares are issued 2061’s share of the voting rights would reduce to
52.9% (63.3% when combined with Te Turanga Ukaipo)
− Depending on the number of Earn-In Shares issued Christian’s and Allsop-Smith’s
share of the voting rights, including all associates of theirs, excluding any impact from
the Post Completion Shares but including the exercise of all of the ESOP Options,
would be between 43.2% and 71.7%. Including the Post Completion Shares their
combined holding would range between 40.0% and 63.3%.
There is a wide range of possible outcomes but from this analysis we conclude:
− In the long term 2061 and its’ associates are unlikely to retain the ability to pass
special resolutions, however, they are most likely to retain the ability to block special
resolutions.
− On the basis that a proportion of shareholders tend not to vote at shareholder
meetings 2061 on its own (before any consideration is given to Te Turanga Ukaipo’s
shareholding) is, for the foreseeable future, likely to be able to singlehandedly pass,
or block, any ordinary resolutions.
The Earn-In Shares have the potential to influence the level of voting control that 2384 and
its’ associates has. Excluding the Post Completion Shares, but allowing for exercise of the
ESOP Options, 2384 will end up with a holding in the range of 9.4% to 45.5% of the voting
rights (see section 9.8). Depending on where it ends up in that range 2384, even allowing for
less than full participation by other shareholders in voting at shareholder meetings, would be
29
unable to singlehandedly pass any ordinary or special resolutions but would potentially be
able to block any ordinary or special resolutions.
We have not considered in detail the possibility of 2061, Te Turanga Ukaipo and 2384
formally being classified as a single shareholding bloc i.e. the three parties agreeing to act in
concert. Under most foreseeable scenarios the combined votes of those parties would
remain above 75% and therefore under this scenario they would have significant voting
control (albeit subject to constraint of legislation and regulation). We note that this scenario
is hypothetical. We have been advised that there are no ongoing shareholder agreements
between the Vendors, or the partial nominees of the Vendors, as to how they may deal in, or
vote, their distinct shareholdings. Similarly, the table of interests in the Profile does not
record any relevant interests as between the Vendors go-forward shareholdings, other than
the disclosed connection between 2061 and Te Turanga Ukaipo.
Board Control
The RTO Agreement provides that upon Completion the Company will have five directors:
− McDonald and Allsop-Smith (representing BCL and 2061 respectively)
− Joyce (existing director and substantial shareholder) and Roger Gower (an existing
independent director with the other two current directors resigning at Completion),
and
− Joe Jensen (a new independent director to be appointed at the Special Meeting).
The appointment and removal of directors is by ordinary resolution so, in theory, 2061
controls the composition of the Board. However, Independent ACE Shareholders should note
that its level of control is limited by requirements of the Listing Rules (e.g. as to the minimum
number of independent directors) and the Act.
Management
It is planned that the ESOP Options will be issued to senior executives (excluding
McDonald) of the Company in the first 12 months after Completion.
Until exercised the ESOP Options carry no voting rights so have no impact on the level of
voting control of the Company. When exercised they will represent no more than 6.2% of the
voting rights of the Company (and down to 3.7% if the maximum number of Earn-In Shares
were issued) so we do not consider them a material factor in assessing the effect of the
Transaction on the ownership and control of ACE.
Ability to Creep
Upon Completion of the Transaction 2061 will control more than 50% of the voting rights in
the Company meaning it will be able to utilise the creep provisions of Rule 7(e) of the Code.
These provisions enable shareholders holding more than 50%, and less than 90%, of the
voting securities in a code company to buy up to an additional 5% of that company’s shares
in any 12 month period without the need for shareholder approval. In this case that means
that 2061 could buy additional shares from the date 12 months after the Completion Date.
The creep provisions do not aggregate the holdings of associates so as 2061’s shareholding
is diluted (e.g. from the Post-Placement Shares, exercise of the ESOP Options and the
potential issue of Earn-In Shares) it is likely that it would lose the ability to utilise the creep
provisions (i.e. if / when its shareholding dropped below 50%).
30
In contrast 2384 will not be able to utilise the creep provisions. While it holds under 20% of
the voting rights (i.e. on Completion he will hold 10.1% of the voting rights) it will be able to
buy additional Shares but only if it remains under 20%. If the issue of Earn-In Shares results
in it owning somewhere in the range of 20% to 50% it would only be able to increase its
shareholding by other provisions of the Code (e.g. a full or partial offer, or an acquisition or
allotment of shares approved by an ordinary resolution).
Prospect of a Subsequent Change of Control
We do not know whether 2061 has investigated alternative methods of selling some, or all,
of AGE or Send. In any event, within ACE they will no longer be focused, single sector
companies rather they will be part of diversified group. Accordingly, it is difficult to
hypothesise as to attractiveness of ACE as a takeover target.
We assume that 2061 would not be interested in making a takeover offer for ACE as that
would essentially see it unwinding the RTO. Similarly, we consider 2384 or its associates as
unlikely acquirers of 100% of ACE.
As a listed company, and the only AI focused company listed on the NZX, ACE will have a
higher profile than it does currently. This may increase the likelihood of a takeover offer for
the Company in the future, however, this is more likely to be influenced by the results of the
Company and its ability to realise value from AI / EAT and transform the existing business
operations of AGE and Send.
We note that the concentrated ownership of the Company (i.e. the Vendors and their
associated allottees owning circa 80%) may make it more attractive to a potential acquirer as
it would be relatively easy to get certainty as to the success, or otherwise, of any offer.
Independent ACE Shareholders have some protection in this scenario as any future offer for
more than 20% of ACE would need to comply with the provisions of the Code and the Listing
Rules.
4.2.5 Impact on ACE’s financial position
A summary of ACE’s financial position is in section 6.6.
The Company’s Total equity at 30 September 2023 was negative $0.8 million with only
$2,530 cash.
The Transaction will materially improve ACE’s financial position. The Debt Capitalisations will
extinguish most of the Company’s liabilities and if the Placement is completed it would mean
that ACE had cash of close to $3.0 million at the parent company level
6
. If the Post
Completion Shares are also issued via a subsequent placement, and assuming no other
material movements in cash, ACE would have close to $10 million in cash, and no debt, in
the parent company.
The existing debt within AGE and Send which is currently provided by Wilshire Treasury (a
related party of 2061) will be refinanced directly with the ANZ Bank. ACE has also arranged
a standby credit facility with 2061 to provide it with additional financial flexibility. This facility
will be for a maximum of $5.0 million, subject to ACE having in place other direct funding
arrangements from a bank lender (see section 8 of the Profile).
6
At any point in time there will be cash and/or overdrafts within each of the subsidiary companies. We do not have full visibility
over a consolidated group balance sheet so our comments are confined to the parent company.
31
4.2.6 Impact on ACE’s financial prospects & risk profile
As a listed shell company with no operating business, and no income generating assets,
ACE is reliant on raising capital (e.g. either issuing new Shares or additional borrowings/
debt) to fund its ongoing operations. As such, the Company is constrained in what it is
realistically able to do.
The Transaction will dramatically transform the Company. It will own several operating
businesses that either are, or are expected to become, cash generating. It will have cash on
hand and, as a listed company, easier access to additional capital. ACE will be operating in
the large, and rapidly growing, AI sector. With a flexible business model and a mandate to
grow ACE will most likely have many opportunities to expand.
The reverse of this is that ACE currently faces very few business risks. After Completion of
the Transaction ACE will face a wide range of new, and large, business risks. These risks
are covered in section 6 of the Profile (Risks to the Being AI Group’s Business and Plans)
and summarised in sections 7.3, 8.4 and 9.4 of this Report. The key risks addressed in the
Profile are:
− Being Consultants, in particular, faces the risk of securing significant contracts
− Each of the acquired businesses has a dependence on key personnel
− Send, in particular, faces a high level of competitive activity
− Each of the acquired businesses will face increased risks from managing their growth
opportunities
− Being Consultants and Send, in particular, face risks from entering new geographic
markets and new verticals
− All business divisions within the Being AI Group will face the risk of the failure of
being able to raise sufficient capital to support ongoing business operations and their
respective growth strategies, and
− AGE and Being Consultants, in particular, are exposed to legal and regulatory
changes.
In addition, general risks such as changes in economic conditions, new legislation, tax
reform, changes in interest and inflation rates may also have an adverse impact on Being
AI’s business and activities, and on its ability to fund its ongoing business operations.
Independent ACE Shareholders need to be aware of, and understand the implications of,
these increased risks as there is no guarantee that ACE will be successful in implementing
its business plan.
4.2.7 Impact on ACE’s share price and liquidity
Details of the history of ACE’s share trading on NZX are in section 6.8. In accordance with
NZX regulations ACE’s Shares were suspended from trading on 11 December 2023 at the
same time as the announcement of the Transaction.
The Shares are illiquid with only sporadic trades. In the 12 month period prior to being
suspended, there were only seven trades of Shares, with a total of just under 300,000, or
1.39% of the total Shares on issue, trading at a VWAP of $0.020.
32
Completion of the Transaction may lead to a re-rating of the Company’s shares. ACE’s
business operations will be transformed and it will be the only AI focused company listed on
the NZX. In addition, if the Placement is completed the number of shares held by
independent shareholders would increase dramatically (i.e. from 16.9 million to 136.9
million) and by virtue of having been done at a price higher than the 12-month VWAP (i.e.
the Placement will be done at not less than $0.025) it is likely to lead to both increased share
trading volumes and, at least initially, a share price above the last traded price of $0.015.
Over time we would expect that at least some of the Shares held by current directors of the
Company, in particular those held by directors resigning upon Completion, could be offered
for sale. This would increase the number of freely tradeable shares although at the time it
could act to suppress the price.
There is no embargo on the Shares that 2384 receives as consideration for selling BCL
although any Earn-In Shares will be subject to a 12-month lock up period. McDonald and
2384 are heavily incentivised to maximise the ACE share price so we assume that they will
not look to sell any Shares until at least the end of the period in which the Contingent
Consideration is calculated.
Independent ACE Shareholders should note that this increased focus on the Company,
increased number of Shares held by independent parties, and the general level of interest in
AI and related technologies, could also be expected to lead to increased volatility in the
Company’s share price meaning the price could go up or down.
Overall, with more freely tradeable shares, and a higher profile, we would expect that
liquidity for the Shares will improve. If the Placement is completed, Independent ACE
Shareholders will own less than 15% of the freely tradable shares so we would expect that
their ability to trade their shareholdings will be increased.
4.2.8 Key advantages and disadvantages to the Independent ACE Shareholders
Advantages
The Independent ACE Shareholders currently own 78.4% of a listed shell company which
has not made a profit since FY20, has negative equity of $0.8 million, doesn’t own any
income generating assets and has a market capitalisation at the last traded price of
$322,000. There were only seven trades of ACE’s Shares on the NZX in all of 2023. The
audit report from the Company’s 2023 Annual Report drew attention to a material uncertainty
relating to ACE’s ability to continue as a going concern.
After the Transaction the Independent ACE Shareholders will own under 1.0% of the
enlarged capital base, however, the Company will own businesses which collectively
generated over $40 million of revenue in their latest financial years
7
and it will have total
equity of a similar amount.
Accordingly, we consider the main advantages to the Independent ACE Shareholders being
increased liquidity for their shareholdings and owning shares in a company with operating
businesses and cash flows, fewer constraints, and more opportunities, than currently.
7
In the year ending March 2023 Send reported revenue of $41.8 million while in the year ending December 2022 AGE reported
revenue of $3.3 million, for a combined total of $45.1 million.
33
Disadvantages
The main disadvantages for the Independent ACE Shareholders is the significant dilution in
their holdings as they go from 78.4% of the issued capital to 0.85%.
Another disadvantage is that while the financial and solvency risks that the Company is
currently exposed to will reduce the operating business risks that the Company faces will
increase substantially.
In our opinion however, the positive factors of the Transaction outweigh these negative
factors.
4.2.9 Key advantages and disadvantages to 2061 (and its associated parties)
Advantages
The Transaction will result in 2061 moving from 100% ownership of two, single industry
private businesses to, at Completion, owning 63.9% (combined with its associate the holding
will be 76.5%) of a diversified, NZX listed AI focused investment and operating company.
The NZX listing should enable a greater profile for the constituent businesses, give them
greater ability to raise debt and equity as well as providing the ability to use Shares as
consideration in acquisitions.
Accordingly, we see the main advantages to 2061 as being increased liquidity for its
investment (subject to constraints, both express and implied, on a major shareholder selling
shares) and a reduced reliance on it to fund all of the cash requirements of AGE and Send.
Disadvantages
The main disadvantage that we see for 2061 is that the cash generated within Send will no
longer be available for dividends or alternative uses within 2061 as it will be retained within
ACE to fund that company’s growth initiatives. Over the three financial years ending March
2023 Send paid 2061 dividends of $1.46 million as well as making subvention payments of
$4.58 million to other companies in the same tax group. ACE has not formally disclosed its
proposed dividend policy, however, the Profile notes that “the Vendors have no current plans
for the Company to pay dividends following the RTO” so we consider it unlikely that there will
be any dividends for some time. This will adversely impact 2061’s cash flow.
The other disadvantage for 2061 is that being the major shareholder of an NZX listed
company is likely to lead to increased market, and media, scrutiny and exposure.
4.2.10 Key advantages and disadvantages to 2384 (and its associated parties)
Advantages
In our opinion McDonald currently faces two main choices. He could develop the BCL
concept in a private company setting (using VC and private equity funding to grow) or in a
NZX listed company (as proposed in the Transaction).
Private capital markets have grown rapidly and there is now a lower advantage in terms of
accessing capital from being listed. Nevertheless, we consider a key advantage for
McDonald from the Transaction as being an increased ability to rapidly grow, and scale, the
BCL business (for example it is less likely that BCL would be able to buy AGE and Send if it
remained as a private company). Other advantages of going public are that 2384’s
34
investment in NZX listed ACE is likely to be more liquid than if it retained its interests in a
private company; the ESOP Options are probably more attractive as a retention tool for
employees by offering to purchase shares in a listed company and it is easier to use a listed
company’s shares as consideration in future acquisitions.
Disadvantages
We consider the main disadvantage for 2384 and McDonald is that in transitioning from a
private company to being the CEO of an NZX listed company McDonald is likely to face
increased market, and media, scrutiny and exposure.
4.2.11 Alternatives to the Transaction
Immediately prior to its Shares being suspended from trading ACE had a market
capitalisation of $322,000. At 30 September 2023 it had negative $0.8 million of equity and
amounts owing to both current and former directors and Excalibur. With no material income
generating assets it will continue to operate at a loss. To date the Company has been almost
solely reliant on related parties via Excalibur to fund these losses. Excalibur has committed
to provide funding to the Company through to the Completion of the Transaction but there is
no commitment of any additional funding from it beyond that.
While the RTO Agreement does not include exclusivity provisions the Company has
confirmed that it is not evaluating any alternative proposals, nor has it received any other
approaches in respect of RTO opportunities since the announcement of the RTO and
Transaction on 11 December 2023. Given the time it took to identify this RTO opportunity,
and formulate the Transaction, we consider the prospect of any alternative transaction
emerging in the near term as low.
4.2.12 Other issues for the Independent ACE Shareholders to consider
Independent Shareholder Approval Required
The Transaction is not a fait accompli. It is being proposed and recommended by the Board
but pursuant to provisions of the Code, and the Listing Rules, the Transaction must be
approved by Independent ACE Shareholders (see section 3 for the regulatory requirements
and voting restrictions).
The Transaction will not occur unless a sufficient majority (more than 50% of the votes cast
for the ordinary resolutions and at least 75% of the votes cast for the special resolution)
approve all of the Transaction Resolutions.
Funding of Restructure Costs
Excalibur has committed to continue making loan advances to ACE to enable the Company
to meet its ongoing compliance costs (e.g. NZX listing) and its costs relating to the
Transaction (e.g. costs for legal fees, NZ RegCo and Takeovers Panel, this Report and the
Special Meeting).
The amount owed to Excalibur at 31 October 2023 was circa $490,000 with the amount
owing at Completion expected to be circa $768,000.
Future Requirements for Capital
Resolutions 4 (the Placement) and 13 (the Post Completion Shares) authorise Share issues
of $3.0 million and at least $7.0 million respectively. If completed the funds from these two
35
placements are expected to be applied to the Company’s strategic plan and growth
opportunities, including:
− corporate costs relating to ongoing operations and growth
− the ongoing working capital and capital expenditure requirements of AGE, Send and
BCL for both their existing operations and any organic growth opportunities, and
− investing in new businesses (e.g. either the initial cost of acquisition and/or
supporting ongoing funding requirements of any such businesses).
It is important for Independent ACE Shareholders to realise that in the future the Company
may well undertake issues of Shares beyond the Placement and the Post Completion
Shares, and that these issues could be material in size. The Notice of Special Meeting
outlines how the Company may seek to use issues of new Shares in support of its growth
strategies, viz.:
− raise new capital to apply towards funding the cash component of any acquisition or
new investment
− be used as consideration to partially fund a potential acquisition of a new business,
and
− fund the development of any new proprietary technology.
While such Share issues would be expected to be at a higher price than the Share Issue
Price of $0.025 per share there is the possibility that the future price is lower. To the extent
that Independent ACE Shareholders either do not or, due to regulatory requirements, cannot
participate in any future capital raises their percentage holding in the Company would be
diluted further.
4.2.13 Likelihood of the Transaction Resolutions being approved
The Board has unanimously recommended the approval of the Transaction Resolutions.
Directors Joyce (2,336,412 or 10.9%) and Keith Jackson (359,407 or 1.7%) collectively
control 12.5% of the Company’s voting securities. Subject to the voting restrictions on the
two directors (see section 3.1.1) we assume that they will vote in favour of the Transaction
Resolutions that they are eligible to vote on.
The Company’s largest shareholder, the Lindsey Investment Trust controlling 15.5% of the
voting securities, acquired its Shares in a placement in July 2020. That placement coincided
with the name change to Ascension and an NZX announcement that the funds raised would
be utilised to cover funding requirements while ACE continued to investigate finding a
suitable business to acquire via a reverse takeover transaction. We assume that having
invested in the Company on the basis that it was seeking an RTO that the Lindsey
Investment Trust will vote in favour of the Transaction Resolutions.
Trinity Portfolio Limited, a company controlled by van Wijk, owns 9.1% of ACE’s voting
rights. While unable to vote on resolution 6 (Directors’ Fees Capitalisation) we assume that
Trinity will vote in favour of all of the resolutions that it is able to.
Other shareholders in the top 10 own 26.4% of the Company’s Shares and the next 10
largest shareholders own a further 16.9%. We are unaware of any of their voting intentions,
however, in addition to the 37.1% owned by directors, the Lindsey Investment Trust and van
36
Wijk, these votes will have a significant influence on the results of the voting at the Special
Meeting.
4.2.14 Implications of the Transaction Resolutions not being approved
If any one of the 12 Transaction Resolutions is not approved the Transaction will not proceed
and ACE will remain as a listed shell company seeking RTO opportunities.
The Board has informed us that despite considering a relatively large number of RTO
opportunities the current Being AI proposal is the only one that it has considered prospective
enough to develop to a stage at which it can be put to shareholders for a vote. Extrapolating
this experience, there can be no certainty as to when, or if, an alternative transaction could
be identified.
Ahead of identifying an alternative transaction ACE would continue to incur costs to maintain
its NZX main board listing. Total operating expenses for the Company have been in the order
of $160,000 for each of the last two years and we do not expect that there would be any
material reduction to that going forward.
With only $2,530 cash on hand at 30 September 2023 ACE would be reliant on share issues
and / or further borrowing to fund these expenses. Excalibur has been the primary source of
funding and while it might be expected to continue supporting ACE there is no guarantee
that they will be willing, or able, to provide funding on terms acceptable to ACE. If no
alternative sources of funding could be arranged in time the Board would need to consider
its options very carefully. These options could include seeking a liquidation of the Company,
which is a scenario that we do not consider likely to deliver any returns to Independent ACE
Shareholders.
If funding were available it would likely be in a similar form of the Excalibur funding to date
i.e. funding that would ultimately be capitalised into Shares at the time of a future RTO. The
more such debt there is to be capitalised the greater the future dilution of the Independent
ACE Shareholders.
If additional funding were not available, the directors may have to seek shareholder approval
to put the Company in liquidation. In that scenario, our view is that the current ACE
shareholders would, most likely, receive no return at all.
Independent ACE Shareholders should also consider the possible flow on effects of not
approving the Transaction Resolutions. Future possible RTO counterparties, and / or
investors, may be less willing to enter into transactions with ACE that require shareholder
approval as there could be less certainty that such approval would be obtained. In addition,
the Company’s auditors would most likely have little alternative but to continue noting the
material uncertainty that exists which may cast significant doubt on ACE’s ability to continue
as a going concern.
4.2.15 Options for shareholders not wishing to retain their investment
Sell on-market
Independent ACE Shareholders who do not wish to retain their investment in ACE after the
Transaction is completed could, once the suspension from trading is lifted, look to sell their
Shares on-market.
We note that about 660 of the 770 current shareholders have a holding which, at the Share
Issue Price, is worth less than $250. The ability to cost effectively sell those Shares may be
37
limited. For other shareholders, there is no guarantee that there will be an immediate
increase in share trading volumes and the price at which any shareholder may be able to sell
Shares could be above, or below, the Share Issue Price.
Minority buy-out rights
If all of the Transaction Resolutions are passed, those Independent ACE Shareholders who
voted all of their shares against special resolution 1 will be entitled to require the Company
to buy their Shares in accordance with the provisions of the Act.
A shareholder entitled to exercise these rights may give written notice to the Company,
within 10 working days of the passing of the special resolution, requiring the Company to
purchase their Shares.
The Company’s Board then has 20 working days to agree to purchase the shares, arrange
for someone else to purchase the shares, seek a court exemption from the obligation to
purchase the shares or not implement the special resolution. In either of the first two
alternatives the price is determined by the Company albeit on the basis that it must be fair
and reasonable and that the selling shareholder can object to the price, in which case the
price is determined by arbitration.
More detail on the minority buy-out provisions is set out in Appendix 3 of the Notice of
Special Meeting.
4.3 Voting for or against the restructure resolutions
At the Special Meeting there are a total of 14 resolutions being put to shareholders however,
our analysis is focused on the 12 Transaction Resolutions (although within those 12 we have
not focused on resolution 10 (Directors’ fees) as other than its interlinked conditionality it is
not material to the Transaction). In any event, Shareholders have three alternatives in
respect of their voting:
− Vote in favour of all 12 Transaction Resolutions and the other two resolutions. If the
Transaction Resolutions are all approved the Company will implement the
Transaction and ACE will be transformed into a diversified AI services, development
and investment business.
− Vote against any or all of the resolutions:
o In the event that any of the Transaction Resolutions is not passed the
Transaction will not proceed and ACE will remain as a listed shell company
looking for other RTO opportunities.
o There are scenarios in this alternative of a shareholder having minority veto
buy-out rights. See section 4.2.15 and Appendix 3 of the Notice of Special
Meeting for details.
− Abstain from voting. In this case the votes of all of the other shareholders who do
vote will determine the outcome.
Voting for or against the Transaction Resolutions is a matter for individual shareholders
based on their own views as to value and future market conditions, risk profile and other
factors. Shareholders will need to consider these consequences and consult their own
professional adviser.
38
5 Evaluation of the Fairness of the Transaction
5.1 Basis of evaluation
Listing Rule 7.10.2 requires an Appraisal Report to state whether or not, in the opinion of the
Appraiser, the terms and conditions of the proposed transactions are fair to the holders of
equity securities other than those associated with the proposed transaction (and any
associated persons of them), and the grounds for that opinion.
There are specific elements of the Transaction that require an Appraisal Report (e.g. the
resolutions in relation to the issue of Shares to directors) however, we have focused more on
the omnibus requirement of the Guidance Note to consider the fairness of the Transaction as
a whole. Accordingly, we state our opinion, and the grounds for that opinion, on the fairness
of each of the major elements of the Transaction:
− the Business Acquisitions and Acquisition Allotments
− the Debt Capitalisations, and
− the Placement and the Employee Option Grant.
This Report is addressed to the Independent Directors of ACE. This Report is for the benefit
of the Independent ACE Shareholders, being those shareholders who are not Associated
Persons (as that term is defined in the Listing Rules) with ACE, Joyce, 2061, Te Turanga
Ukaipo or 2384.
There is no legal definition of the term “fair” in New Zealand in either the Listing Rules or in
any statute dealing with securities or commercial law.
The accepted convention in Australian M&A practice is that ‘fair and reasonable’ is not a
compound phrase and that the expert needs to consider whether it is ‘fair’ and whether it is
‘reasonable’. Under this convention, an offer is ‘fair’ if the value of the consideration is equal
to or greater than the value [of the securities] the subject of an offer. This is extended to
outline how an offer is ‘reasonable’ if it is fair and also how it might also be ‘reasonable’ if,
despite being ‘not fair’, the expert believes that there are sufficient reasons for security
holders to accept the offer in the absence of any higher bid before the close of the offer.
We incorporate that approach, and the ordinary meaning of the term “fairness”, into our
analysis which is also based on the generally accepted principle that an assessment of the
fairness of a transaction (as required under Listing Rules) is a narrower test than an
assessment of the merits of a transaction (as required under the Code).
Accordingly, our evaluation of the fairness of the Transaction has focused on:
− the terms and conditions of the Transaction, and
− the potential impact on the ownership and control of ACE.
However, we have also given regard to:
− the rationale for the Transaction
− the likelihood of the Transaction being approved and the implications of it not being
approved, and
39
− benefits and disadvantages to key parties to the Transaction.
In our opinion, after giving due regard to all of the relevant factors, while we consider
that there are individual components of the Transaction that we do not consider fair,
when viewed as a whole we consider that the terms and conditions of the Transaction
are fair to the Independent ACE Shareholders.
Our opinion should be considered as a whole. Selecting only portions, without considering all
the factors and analysis together, could create a misleading view of the factors and process
underlying the opinion.
5.2 Evaluation of the fairness of the Transaction
The basis for our opinion is expanded upon in section 4.2. In summary, the key points we
considered in reaching this conclusion are as follows:
5.2.1 The Business Acquisitions and Acquisition Allotments
The terms and conditions of the Business Acquisitions and Acquisition Allotments in respect
of AGE and Send are fair:
− The prices paid for each of these businesses is within our assessed value range.
− The terms of the RTO Agreement relating to the sale of these two businesses are
broadly in line with market practice for a transaction of this nature.
In respect of the BCL Business Acquisition and Acquisition Allotment we consider:
− The initial price paid for the business lies within a reasonable valuation range, and
the terms of the RTO Agreement relating to the sale are broadly in line with market
practice, so we find these elements to be fair.
− That the Contingent Consideration represents too large a proportion of the potential
value accretion to the Company and accordingly we consider this unfair to the
Independent ACE Shareholders.
The Acquisition Allotments have a material impact on the ownership and control of ACE.
Immediately after Completion 2061 and its associates have over 75% of the issued capital.
Depending on how many Earn-In Shares are issued to 2384, it and 2061 (and associates)
could collectively own around 90% of the issued Shares. Over time, due to additional new
Share issues (e.g. the Post Completion Shares) this percentage could be expected to
reduce thus limiting the degree of control that 2061 (and its associates) and 2384 (and its
associates) have on ACE. Noting too the constraints on this control contained within the
Listing Rules, the Act, the Code and Company’s Constitution we do not consider this level of
ownership and control to be unfair to the Independent ACE Shareholders.
Weighing up the relative importance of each of the Business Acquisitions, the ratio of the
Shares held by the Vendors relative to the Shares held by the Independent Shareholders,
the likelihood of the Contingent Consideration being a material factor in the future and the
returns that Independent ACE Shareholder would have before it does become a material
factor, we consider that overall the Business Acquisitions and Acquisition Allotments are fair
to the Independent ACE Shareholders.
40
5.2.2 The Debt Capitalisations
The debts to Excalibur and the directors (both current and former), which have been
provided at either 0% of 5% p.a. interest rates, are to be repaid via the issue of new Shares
at the same Share Issue Price as the other elements of the Transaction. Section 10 details
our analysis which finds the Share Issue Price to be fair.
In the overall context of the Transaction there is minimal impact on the ownership and
control of ACE from the Debt Capitalisations as the Shares to be issued will represent 2.34%
of the Shares at Completion.
Combining these factors, we consider the Debt Capitalisations to be fair to the Independent
ACE Shareholders.
5.2.3 The Placement and the Employee Option Grant
Terms and Conditions
The terms and conditions of the Placement and the Employee Option Grant are in line with
market practice for these types of issues.
Impact on Ownership and Control
By diluting the interests of 2061 and 2384 we consider that the Placement and the ESOP
Options have a positive impact on the ownership and control of ACE.
We assume that these Shares will be owned by a range of independent professional
investors and senior executives, respectively. Such a spread would generally be seen as
positive to the Independent ACE Shareholders in respect of increased investor interest in the
Company with potential positive implications for share price performance and liquidity of the
Shares.
5.2.4 Other Factors Considered
The Transaction comprises a large, multi-faceted set of individual transactions. As such, to
assess the fairness of it we consider that a wide range of factors need to be assessed. Other
matters that we have incorporated into forming our opinion are:
− The rational for the Transaction is sound as it achieves the Board’s long stated
objective of using the ACE listed shell for a backdoor listing of a meaningful
business.
− The process that ACE has undertaken to formulate the Transaction is sound.
− The positive impact that the Transaction has on the Company’s financial position.
− Operating in a large, and growing, market means that ACE will have more
opportunities than ACE currently has.
− As evidenced by the time it has taken to identify an RTO opportunity suitable to be
put in front of shareholders there would (in the absence of this Transaction) be
considerable uncertainty as to when, or if, the directors would be in a position to
formulate an alternative RTO transaction.
41
− There are material implications for the Independent ACE Shareholders if the
Transaction Resolutions are not approved. At best their holdings (and possible future
returns) would be diluted further while at worst the Company could end up in
liquidation (which would likely mean no return to them at all).
5.3 Voting for or against the restructure resolutions
Voting for or against the Transaction Resolutions is a matter for individual shareholders
based on their own views as to value and future market conditions, risk profile and other
factors. Shareholders will need to consider these consequences and consult their own
professional adviser.
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6 Profile of Ascension Capital Limited
6.1 Background
ACE was incorporated on 21 January 2000 as E-Analyst Limited (which was a subsidiary of
Heritage Gold NZ Limited). Within three weeks it had changed its name to E-cademy
Holdings Limited which then listed on the NZX Main Board on 18 April 2000 through the
issue of 40,000,000 shares at a price of $0.09 per share. Subsequent name changes have
been to:
− Training Solutions Plus Limited on 16 July 2003
− TRS Investments Limited on 31 Jan 2007, and
− Ascension Capital Limited on 10 July 2020.
E-cademy Holdings Limited’s, and later Training Solutions Plus Limited’s, principal activities
were the selling of training and education services through different media including e-
learning.
In February 2007 the Company divested its training businesses and became an investment
company, focused on investment in small cap stocks listed on the ASX. In 2010 the
Company divested its ASX investments and became a shell company focused on RTO
opportunities. Several transactions were explored between 2010 and 2016, however, none
came to fruition.
On 22 August 2016 HuaHun International Holdings acquired a 52.25% shareholding in the
Company and transformed the Company into a listed investment company, focusing on
investment opportunities in:
− exporting products to China
− real estate development in New Zealand, and
− acquisition of Chinese assets.
Between 2016 and 2020 one transaction with LIDA Agricultural International Holdings
Limited was explored in detail although that transaction did not eventuate.
In June 2020 the Company undertook a capital reconstruction. This included:
− The major shareholder selling its shareholding to several new investors, including
Excalibur.
− The issue of new shares to new investors.
− Recording the assignment of a c.$360k loan facility from HuaHun International
Holdings to Excalibur.
− The renaming of the Company to Ascension Capital Limited and the change of its
NZX ticker code from TRS to ACE.
Following these changes ACE has continued to operate as a shell company on the NZX
Main Board seeking RTO opportunities.
43
Further information on ACE can be found at:
- The Company’s own website: https://ascensioncapital.co.nz/
- NZX’s website: https://www.nzx.com/companies/ACE
6.2 Nature of current operations
ACE is a shell company listed on the NZX Main Board and it does not currently have any
trading operations.
6.3 Directors
ACE’s current directors are:
− Keith Jackson, chair
− John Cilliers, independent director
− Roger Gower, independent director, and
− Sean Joyce, non-independent director.
6.4 Capital structure and shareholders
6.4.1 Equity
The Company currently has 21,498,828 ordinary shares on issue held by 770 shareholders.
The table below provides a breakdown of the ten largest shareholders as at 6 December
2023.
ACE top ten shareholders
Name Shares held % Held
Forsyth Barr Custodians Limited Account 1E 3,331,781 15.5%
Excalibur Capital Partners Limited 2,336,412 10.9%
Trinity Portfolio Limited 1,947,227 9.1%
Forsyth Barr Custodians Limited Account 1-Custody 1,451,440 6.8%
Ilakolako Investments Limited 1,044,350 4.9%
Foster Capital NZ Limited 890,000 4.1%
Li Da Yang 666,660 3.1%
Beconwood Superannuation Pty Limited 600,000 2.8%
Chao Wang 533,340 2.5%
Belinda Anne Edmond 500,000 2.3%
Sub-total top ten 13,301,210 61.9%
Other shareholders 8,197,618 38.1%
Total 21,498,828 100.0%
Source: Company Share Register, as at 6 December 2023
44
6.4.2 Debt
For the last two financial years Excalibur has provided funds to ACE to enable the Company
to meet its cash flow requirements. At 30 September the outstanding balance of these loans
amounted to $482,000. This amount is expected to increase as Excalibur has committed to
fund the costs associated with the Transaction and at the Completion Date the amount
owing to Excalibur is expected to be circa $768,000.
In conjunction with completion of the Transaction $768,000 of this debt will be capitalised
into 30.720 million new Shares at an issue price of $0.025 per Share.
6.5 Financial performance
A summary profit and loss statement of ACE is presented below.
ACE Statement of Financial Performance
FYE 31 March FY20 FY21 FY22 FY23 YTD
NZ$000's audited audited audited audited
30-Sept
unaudited
Interest Income 1.6 0.4 0.2 0.5 0.4
Other Income 93.8 - - - -
Revenue 95.3 0.4 0.2 0.5 0.4
Directors' Fees (40.0) (70.0) (80.0) (80.0) (40.0)
NZX Fees (18.7) (23.5) (16.6) (21.0) (8.5)
Legal Fees 7.0 (13.0) (1.5) (4.1) (2.8)
Audit Fees (16.3) (19.2) (25.5) (23.9) (14.1)
Other (12.4) (25.2) (47.2) (27.8) (19.0)
Total Operating Costs (80.4) (150.9) (170.8) (156.8) (84.4)
EBIT 14.9 (150.5) (170.7) (156.3) (84.0)
NPBT 14.9 (150.5) (171.2) (160.5) (86.4)
Tax - - - - -
NPAT 14.9 (150.5) (171.2) (160.5) (86.4)
Source: ACE financial statements
Commentary:
− Revenue is primarily interest earned on deposits. The large Other Income amount in
FY20 relates to a non-refundable payment received in relation to a transaction that
did not reach completion.
− Expenses primarily relate to listing and governance costs.
6.6 Financial position
A summary balance sheet for ACE is presented below the commentary.
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Commentary:
− As a shell company ACE’s only material asset is a term deposit with ANZ Bank that
supports a bond issued in favour of the NZX.
− ACE’s Directors have agreed to accrue their fees instead of receiving cash payment.
These fees, shown as a separate line item in the balance sheet, will be capitalised
into Shares as part of the Transaction. In addition, the $45,000 owing to van Wijk
(included within Trade and Other Payables in the balance sheet) is to be capitalised
into new Shares.
− The Related Party Unsecured Advances are amounts owing to Excalibur. The
interest rate on the loans is a mix of either 0% or 5% p.a. (see 6.6.1).
− ACE has reported a negative equity position in each of the last four years. While the
Directors acknowledge material uncertainties with respect to the going concern
assumption Sean Joyce, through Excalibur, confirmed that he is willing and able to
provide all reasonable financial support to the Company to ensure that Ascension is
able to meet its obligations as they fall due for at least 12 months from the date the
FY23 financial statements were approved.
− The large balance of negative retained earnings reflects the long period that ACE,
and its predecessors, have been operating at a loss.
ACE Statement of Financial Position
As at 31 March FY20 FY21 FY22 FY23 30-Sep-23
NZ$000's audited audited audited audited unaudited
Current Assets
4.4 4.9 4.4 4.8 13.8
Trade and Other Payables
(39.4) (68.7) (69.0) (72.5) (64.4)
Accrued Directors' Fees
(100.0) (110.0) (190.0) (270.0) (310.0)
Net Working Capital
(135.1) (173.8) (254.6) (337.7) (360.6)
Term Deposit - NZX Bond
20.2 20.6 20.7 21.1 21.5
Total Net Operating Assets
(114.8) (153.2) (233.9) (316.6) (339.0)
Capital Employed
(Cash) / Overdraft
(15.7) (49.1) (4.1) (0.6) (2.5)
Related Party Unsecured
359.9 359.9 405.4 479.6 482.0
Net Debt
344.2 310.8 401.4 479.1 479.5
Share Capital
15,926.0 16,071.5 16,071.5 16,071.5 16,135.1
Retained Earnings
(16,385.1) (16,535.6) (16,706.8) (16,867.3) (16,953.6)
Total Shareholders' Funds
(459.1) (464.0) (635.2) (795.7) (818.5)
Net Debt and Shareholders'
Funds
(114.8) (153.2) (233.9) (316.6) (339.0)
Source: ACE financial statements
The 2023 financial statements noted that the Company had $783,000 of tax losses for which
no deferred tax asset had been recognised. Utilisation of those losses is subject to
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compliance with income tax legislation on continuity of shareholders and / or business
activities and the availability of future taxable income.
6.6.1 Excalibur Debt
The initial Excalibur Debt arose in 2020 when the former major shareholder of ACE assigned
its advance (of c. $360,000) to Excalibur as part of a wider capital reconstruction.
Subsequently to that assignment Excalibur advanced a further $20,000 under the Loan
facility agreement. That loan ($379,910 at 30 September 2023) is unsecured and non-
interest bearing. Additional funds have been advanced on several occasions by Excalibur
pursuant to a Working Capital Loan Facility Agreement (unsecured, 5.0% p.a. interest rate)
with the balance outstanding (including c.$6,500 of accrued interest) at 30 September 2023
of $102,106. Further advances have been made since 30 September 2023, and will be
made up until Completion, to cover ACE’s ongoing compliance costs and the costs of the
Transaction. The balance outstanding at Completion is expected to be c. $768,000.
6.7 Cash flows
A summarised cash flow statement for ACE is presented below.
ACE Statement of Cash Flows
FYE 31 March FY21 FY22 FY23 YTD
NZ$000's audited audited audited
30-Sept
unaudited
NPAT
(150.5) (171.2) (160.5) (86.4)
(Increase) / Decrease in Net Working
Capital
38.7 80.8 83.1 22.8
Total Operating Cash Flows
(111.8) (90.4) (77.4) (63.6)
(Purchase) / Sale of Investments
(0.3) (0.2) (0.4) (0.4)
Total Investing Cash Flows
(0.3) (0.2) (0.4) (0.4)
(Decrease) / Increase in Debt
- 45.5 74.2 2.4
(Decrease) / Increase in Share Capital
145.5 - - 63.6
Total Financing Cash Flows
145.5 45.5 74.2 65.9
Net Cash Flows
33.4 (45.0) (3.5) 2.0
Opening Cash
15.7 49.1 4.1 0.6
Closing Cash
49.1 4.1 0.6 2.5
Source: ACE financial statements
Commentary:
− As ACE is not a trading entity operating cash flows are minimal, with the exception of
paying expenses in relation to maintaining its NZX listing.
− Operating losses have been funded through related party debt (Excalibur) and share
issues.
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6.8 Share price history
The chart below presents ACE’s daily closing share price over the last three years up to 10
December 2023. ACE undertook a 100:1 share consolidation on 5 November 2021 with
trading prior to that date adjusted for the consolidation.
No shares have traded since 17 October 2023. On 11 December 2023, and in accordance
with the Guidance Note, NZ RegCo suspended trading in ACE shares at the same time as
the announcement of the Transaction.
Over the full three year period shown in the chart, ACE’s shares have traded between
$0.015 and $0.20 at a Volume Weighted Average Price (“VWAP”) of $0.074.
The chart shows a steadily declining share price and increasingly sporadic trading over the
period. Share prices, volume, and liquidity
8
for the most recent 1-month, 3-month, 6-month,
and 12-month periods are set out below. The analysis shows that ACE’s shares have been
illiquid over the period.
ACE Share Trading
Period Ending 10 December
2023
Low ($) High ($) VWAP ($) Volume
Traded
Liquidity
(%)
1-month 0.015 0.015 n.a. - 0.00%
3-months 0.015 0.018 0.017 199,768 0.93%
6-months 0.015 0.035 0.018 257,768 1.20%
12-months 0.015 0.055 0.020 299,768 1.39%
Source: S&P Capital IQ
8
Liquidity is measured as volume traded as a percentage of current shares outstanding.
-
50
100
150
200
250
300
350
0.00
0.05
0.10
0.15
0.20
0.25
Volume Traded (000's)
Share Price ($)
ACE Share Price and Volume
Volume (RHS)Share Price (LHS)
Source: S&P CapitalIQ
48
7 Profile and Valuation of AGE Limited
7.1 Overview of AGE
The Profile provides a comprehensive overview of AGE, we therefore provide only a
summary of AGE’s business and operations below.
AGE was incorporated on 22 June 2017 and began operating a boutique urban school
located in Takapuna, Auckland in 2018. The school is designed for children from year 1 to 13
who thrive in smaller class sizes.
AGE’s vision is to help students become curious, creative and compassionate learners by
making their education meaningful and highly relevant to the changing world they live in.
AGE School’s learning coaches (teachers) team up with NZ innovators and business people
(including Christian and McDonald) to mentor students on projects that stretch them well
beyond the four walls of a classroom. This helps students understand how important
technology, entrepreneurial thinking, and creativity are in the world they’re growing up in and
gives their learning that much more meaning. More information about AGE can be found at
the school’s website https://www.age.school.nz/
7.2 Growth strategies
With the current site at full capacity of 100 students AGE is considering a possible expansion
into another site at Takapuna that will have a focus on the senior school i.e. years 9 to 13.
This expansion is intended to allow both the senior and junior schools to grow significantly.
We understand that AGE is currently investigating expanding the existing school’s footprint
and opening at another site however it is too early in the process to provide any details
around potential costs and timeframes.
In addition, AGE is in the course of expanding its online teaching platform which will be
supported by access to EAT and AI expertise held and developed by BCL. AGE is also
exploring opportunities provided through the intended upcoming reforms to the Education
Act 1989 as provided for in the Coalition Agreement between the National Party and Act New
Zealand.
7.3 Key business risks
Section 6 in the Profile sets out a description of the key risks relating to the businesses being
acquired. The risks that are particularly relevant to AGE are summarised below:
− Dependence on key personnel. AGE is heavily reliant on certain key personnel (in
particular the principal, Andrea Tong) and if any of them were to leave its operations
and financial performance could be adversely affected.
− Management of growth opportunities. ACE intends to expand its business through
organic growth and strategic acquisitions. Should it not successfully identify the right
opportunities its operational and financial performance will be adversely affected.
− Legal and Regulatory changes. AGE is subject to the Education Act 1989
(specifically Schedule 7), Building Act 2004 and Health and Safety at Work Act 2015.
AGE faces the ongoing risk of failing to comply with any of these regulations while
there is also a risk that any material changes to these, or other, regulations will
interfere with its ability to implement its business growth strategies.
49
7.4 Financial information
AGE has provided audited financial accounts for FY22 and an audited income and
expenditure account for FY21
9
. Unaudited financials for FY20, FY21 (including balance
sheet and cash flow), and year to date (“YTD”) period for the 9 months to September 2023
have also been provided. No prospective financial information has been provided in the
Profile.
7.4.1 Financial performance
A summarised statement of financial performance is presented below.
AGE Statement of Financial Performance
FYE 31 December FY20 FY21 FY22 YTD FY23
NZ$000's
unaudited
unaudited
audited
30-Sept
unaudited
Revenue excl. Subvention Payment
Income
721 1,155 1,852 1,749
EBITDA (860) (1,109) (923) (68)
EBIT
(929) (1,326) (1,115) (229)
NPBT
(1,040) (1,471) (1,331) (360)
Subvention payments
1,065 1,579 1,423 360
NPAT
25 108 91 -
Source: AGE financial statements
Commentary:
− AGE’s financial year is January to December which lines up with the school year.
− As a relatively newly established business, only opening at its current site in Term 1
of 2021, AGE’s revenue has grown consistently over the period.
− As an independent school AGE receives no funding from the Government with all of
its revenue from fees from its pupils.
− At around 50% of all costs Salaries and Wages are the single largest expense item.
− Operating a school requires a high level of fixed costs which must be incurred
irrespective of the level of revenue. This means that losses are to be expected in the
early years of operation as student numbers, and therefore revenue, is still growing.
Accordingly, we are not overly surprised to see that AGE has been operating at a
loss. We note that the amount of the loss has been declining and in the 9 months to
9
As per Ministry of Education requirements AGE is only required to prepare audited income and expenditure accounts.
50
September 2023 the EBITDA loss was only $68,000 (equivalent to $91,000 on an
annualised basis).
− AGE has received Subvention Payment income from other members of the same tax
group. In our presentation of the income statement this has been excluded from
Revenue (and so also from EBITDA, EBIT and NPBT) with the impact shown in the
row between NPBT and NPAT.
7.4.2 Financial position
A summarised statement of financial position is presented below.
AGE Statement of Financial Position
As at 31 December FY21 FY22 30-Sept
NZ$000's unaudited audited unaudited
Current Assets 2,564 2,104 2,111
Current Liabilities (1,479) (1,935) (1,676)
Net working capital 1,085 168 434
Property, Plant & Equipment 2,746 2,814 2,660
Other Non-current Assets 6 5 4
Non-current Liabilities (Non-interest Bearing) - (70) (113)
Net Non-current Assets 2,752 2,749 2,552
Net Operating Assets 3,837 2,917 2,986
(Cash) / Overdraft
(99) (209) (293)
Debt
24 20 13
Related-party Debt
3,699 2,803 2,963
Net Debt
3,624 2,614 2,683
Total Shareholders' Funds
213 303 303
Total shareholders' funds & net debt 3,837 2,917 2,986
Source: AGE financial statements
Commentary:
− Current Assets are primarily receivables related to Subvention Payments from other
entities in the same tax group.
− Current Liabilities are primarily amounts payable to related entities and student fees
recorded as Income in Advance
10
.
− Property, Plant & Equipment is predominantly Leasehold Improvements relating to
the school building in Takapuna.
10
This is the appropriate accounting treatment for income received in advance of providing the service with income recognised
over time (as the service is provided) and a corresponding reduction in the Income in Advance liability.
51
− Related-party Debt represents loans from Wilshire Treasury Limited (the funding arm
for 2061 LP’s business interests). It is planned that in conjunction with Completion
these advances will be re-financed directly with ANZ Bank.
7.4.3 Cash flows
A summarised statement of cash flows is presented below.
AGE Statement of Cash Flows
FYE 31 December FY21 FY22 YTD FY23
NZ$000's
unaudited
audited
30-Sep
unaudited
Net Operating Cash Flows n.a. 1,270 (63)
Net Investing Cash Flows n.a. (259) (7)
Net Financing Cash Flows n.a. (901) 154
Net Cash Flows n.a. 110 84
Opening Cash n.a. 99 209
Closing Cash 99 209 293
Source: AGE financial statements
Commentary:
− Despite incurring operating losses AGE had positive operating cashflows in FY22
largely as a result of the receipt of subvention payments.
− With substantial investment in the current school site prior to opening at the start of
2021 (primarily in Leasehold Improvements) AGE might be expected to have several
years of reduced capital expenditure (i.e. lower Investing Cashflows) in relation to its
current premises.
− Net Financing Cashflow primarily reflects movements in advances from the parent
company.
7.5 Valuation of AGE
7.5.1 Concept of value
The concept of value that we have adopted is one of a market value being the price at which
a willing but not anxious vendor would sell, and a willing but not anxious purchaser would
buy. This assumes both parties are adequately informed of the relevant facts, and neither is
under any compulsion to buy or sell.
7.5.2 Approach to valuation
Valuation methodologies can generally be categorised into one of two types, namely a
valuation based on future financial performance or a valuation on the realisation of assets.
52
The key differentiating assumption for the former is the assumption that the business will
remain operating.
AGE is a business which will continue operating, meaning a valuation based on the
realisation of assets is not appropriate. However, a valuation based on future financial
performance is problematic:
− There are no forecasts or other prospective financial information in the Profile.
− As an early stage business AGE was loss making in each of the 2021 and 2022
financial years and is only expected to be marginally profitable in FY23.
Accordingly, we do not have the requisite information to construct a forward looking
discounted cash flow (“DCF”) valuation model nor is there a current earnings figure that
could assist in forming an estimate of Future Maintainable Earnings (“FME”) for a multiple
based valuation. To assess the reasonableness of the price being paid for AGE our analysis
is based on methodologies that are commonly used to value early stage businesses,
namely:
− revenue multiples
− cost to replicate, and
− multiples of invested capital.
7.5.3 Valuation methodology
Using the S&P Capital IQ (“CapIQ”) financial database we analysed the current trading
multiples for 70 listed companies, in global developed markets, which are categorised as
having a primary industry classification of ‘Schools’. Full information was not available on all
of the companies but there were still over 50 companies from which we could assess trading
valuation multiples. See section 15 (Appendix 3) for more information.
The primary factors of any valuation multiple are future estimated growth rates, reinvestment
requirements (i.e. how much capital needs to be reinvested in the business to support
growth) and the variability, or riskiness, of the future earnings of the business. All other
things being equal the higher the growth rate the higher the appropriate multiple and the
lower the amount of investment required, and the lower the variability of the business’
earnings, the higher the appropriate multiple.
With such a large number of comparable companies in our data set it was not appropriate to
do a detailed review of each of them however, our underlying assumption is that AGE
compares favourably with them and thus an appropriate multiple is towards the top end of
the observed range. The main factors behind this assumption are:
− Growth rates are assumed to be higher for AGE than the comparables as it is a
younger business which is starting from a smaller base, it has more of a unique
proposition (i.e. has less direct competition) and the new Government’s policy
supporting partnership, or charter, schools may provide AGE with additional
opportunities.
− Reinvestment requirements for AGE, for any level of growth, are assumed to be
lower than the comparables as AGE’s general business model is an asset light one
(e.g. not necessarily owning large amounts of bricks and mortar infrastructure) and in
addition the future strategies include virtual and remote learning opportunities.
53
− The variability of AGE’s earnings, and cashflows, are assumed to be in line with, if
not lower than, the average of the comparables. AGE’s niche market offering leaves
it less exposed to competition and its asset light business model reduces the
likelihood of major capital expenditure requirements in future.
Based on these assumptions we adopted a range of the trading multiples of the comparable
companies broadly represented by the band between the 75
th
percentile and the 90
th
percentile. That is, the low end of the multiple range is higher than 75% of all the observed
multiples while the top end of the range is higher than 90% of all the observed multiples.
7.5.4 Revenue multiples
As AGE is a young growing company we consider it appropriate to use the most recent
revenue figures available. We disregarded FY22’s $1.85 million figure and instead use an
estimate based on annualising the revenue for the 9 month YTD period ending September
2023. Operating revenue in that period was $1.749 million and assuming revenue is evenly
spread across the financial year we calculated an annualised estimate of this figure of $2.33
million. This is classified as Last Twelve Months (“LTM”) revenue.
The comparable companies have an average Enterprise Value (“EV”) / LTM revenue multiple
of 1.5x, a 75
th
percentile of 1.9x and a 90
th
percentile of 3.4x. Using a multiple range of 2.0x
to 3.5x results in values for 100% of the equity of AGE of between $1.98 million and $5.48
million.
We noted this value range but ultimately disregarded it as we consider it an unrealistic
estimate of current market value given the costs to establish a school, the fact that AGE is
only in its first few years of operation and the scope of opportunities in front of it.
We note that the top three companies in the sample had EV/LTM revenue multiples of
between 6.0x and 7.6x. Applying these multiples to AGE would result in values for 100% of
the equity between $11.31 million and $15.04 million.
7.5.5 Cost to replicate / multiples of Invested Capital
These two approaches to value are both based on a similar premise and consider the
amount that has been invested in the business to date (i.e. to establish the school and fund
operating losses in the early years) and then assess a market value as some multiple of that
amount. In this case the multiple is a reflection, among other things, of the stage of the
business, the opportunities the business has and how scalable the business model is.
Invested Capital is defined as the amount of capital contributed, either by way of equity or
debt, that has been invested in the business. In AGE’s case we have adopted a modified
measure reflecting that as well as debt and equity the business has been funded in other
ways i.e.
− it has received subvention payments (from other companies owned by the same
shareholder), and
− some related party (non-interest bearing) accounts payables appear to be more debt
like (i.e. they look to be being provided on extended payment terms).
These amounts are both genuine cash contributions to the business by the major
shareholder and could have been put into AGE in the form of shares or debt however,
reflecting the historic position of being 100% owned by a single private owner, the funds
54
have been able to be provided in this manner. On this basis we calculate adjusted Invested
Capital at 30 September 2023 to be $6.58 million.
AGE Calculation of Adjusted Invested Capital
as at 30 September 2023
NZ$000's
Share Capital
1
Debt
13
Related Party Debt
2,963
Cash received from Subvention Payments
2,644
Related Party Payables (on Extended Terms)
955
Adjusted Invested Capital
6,576
source: AGE financial statements
The comparable companies we reviewed had a median Price (or Equity Value) / Invested
Capital multiple of 0.8x, a 75
th
percentile of 1.6x and a maximum of 6.8x. The corresponding
figures for the Enterprise Value / Invested Capital were 0.9x, 1.4x and 7.0x.
Reviewing the multiples of the comparable companies, and considering AGE’s assumed
relative competitive position we have adopted the following multiple ranges:
− Price / Invested Capital: 1.5x to 2.5x, and
− Enterprise Value / Invested Capital: 1.4x to 2.8x
Using these approaches we derive ranges for the value of 100% of the equity of AGE of
between $9.9 million and $16.4 million (with an average of $13.2 million) and between $6.5
million and $15.7 million (with an average of $11.1 million). Details are shown in the following
two tables.
AGE Price / Invested Capital Based Valuation
NZ$000’s Low High
Price / Invested Capital 1.50 x 2.50 x
Adj. Invested Capital (30 Sept 2023) 6,576
Equity Value (Equal to Price) 9,864 16,441
AGE Enterprise Value / Invested Capital Based Valuation
NZ$000’s Low High
Ent Val / Invested Capital 1.4 x 2.8 x
Adj. Invested Capital (30 Sept 2023) 6,576
Enterprise Value 9,207 18,414
Net Debt (2,683)
Equity Value 6,524 15,731
55
7.5.6 AGE valuation conclusion
It is generally accepted that the valuation of early stage businesses, which can be loss
making and / or yet to achieve critical mass, is difficult and can be prone to a wide range of
outcomes. AGE is an early stage business which is yet to make profits and no prospective
financial information has been provided.
In assessing the value of AGE we considered multiples of the capital invested in the
business as the most appropriate method. Using that approach, and disregarding the lowest
and the highest of the four figures we calculated, we derive a value range for 100% of the
equity of AGE to be between $9.9 million and $15.7 million with an average of $12.8
million. This compares with a sale price of $15.0 million which sits within, albeit at the top
end of, our assessed valuation range.
56
8 Profile and Valuation of Send Global Limited
8.1 Overview of Send
Send was incorporated on 15 December 2003 as Mail Holdings Limited. It has subsequently
changed its name several times:
− in 2012 to SEND Group Limited
− in 2015 to G3 Group Limited, and
− in 2023 to Send Global Limited
Send is the parent company for two operating companies:
− New Zealand Mail Limited (“NZ Mail”), and
− Filecorp NZ Limited (“Filecorp”)
The Profile provides a comprehensive overview of Send, we therefore provide only a
summary of Send’s business and operations below.
The principal services provided by Send are:
− mail, parcel and logistics
o business mail services
o domestic courier and freight
o pickup and delivery services
o unified logistics
− outsourced business solutions
o filing and consumables
o mail house services
o mail room management
o consultancy services
o over printing
Under Send’s operating model all of NZ Mail’s services are provided by third parties.
8.2 Growth strategies
Send has separate growth strategies for its two operating subsidiaries NZ Mail and Filecorp.
57
8.2.1 NZ Mail
The growth strategies for NZ Mail are:
− Continue to lower discounts for all customers to maximise pricing for profit.
− Acquire more bulk mail customers to improve NZ Mail’s market awareness and
profile.
− Expand on NZ Mail’s direct entry gateway into Australia Post, thus allowing NZ Mail
to bypass New Zealand Post’s commercial pricing for magazine mail destined for
delivery into Australia.
− Develop capability that allows customers to access freight requirements using an
online booking system that will provide multi service and carrier options.
− Expand NZ Mail’s offering into new cloud-based logistics offerings (courier) via third
party platforms or through an internally developed platform.
8.2.2 Filecorp
The growth strategies for Filecorp are:
− A three-phase initiative to gain a share of filing products across the Ministry of Justice
under a preferred supplier arrangement.
− Secure supply to schools not currently covered in Samoa. Build archiving capability
and infrastructure in Samoa in a possible joint venture with Samoa Stationery or the
Samoa Government.
− A two stage approach to expanding its business with Te Whatu Ora of securing
existing hospital files for FY24, add additional DHBs not currently being supplied and
implement volume pricing to centralised procurement.
− Target growth in Australia through an identified major reseller group. Target sectors
with legislated requirements to maintain hard copy files.
8.3 Key people
− Paul Forno – CEO. Paul has worked in government, not for profit, media and
education sectors as well as running his own consultancy business. As well as
experience as a senior executive Paul has also been a director of several New
Zealand companies.
In addition to Paul Forno the other key executive with experience in Send is Mike Dunshea
who will be the group CFO and who was, until recently, CFO for Send (see section 9.3).
8.4 Key business risks
Section 6 in the Profile sets out a description of the key risks relating to the businesses being
acquired. The risks that are particularly relevant to Send are summarised below:
− Dependence on key personnel. Send is heavily reliant on key personnel, in particular
Paul Forno (Director and CEO). If Send were to lose the services of these key
individuals it could have a material adverse effect on future performance.
58
− Competition. The logistics, courier and file management sectors in NZ are highly
competitive. The actions of current, or the emergence of new, competitors could
impact the price at which Send can sell its services and / or reduce the demand for
Send’s services which could adversely impact Send’s financial performance.
− Management of Growth Opportunities. Growth is planned both organically and
through strategic acquisitions. However, there is no assurance that ACE will be
successful in securing future acquisitions to accelerate its growth.
− Entry into new geographic markets and new verticals. ACE believes that there are
substantial opportunities in both NZ and Australia and accordingly has ambitions to
expand into other geographic markets and other market verticals. There is a risk that
ACE will fail to successfully execute its strategy in respect of growth in this manner.
8.5 Financial information
Audited financial information for the FY22 and FY23 years, and unaudited financial
information for the FY20, FY21, and YTD periods has been provided by Send. No
prospective financial information has been included or provided in the Profile.
8.5.1 Financial performance
A summary profit and loss statement of Send is presented below.
Send Statement of Financial Performance
FYE 31 March FY20 FY21 FY22 FY23 YTD FY24
NZ$000's unaudited unaudited audited audited
30-Sept
unaudited
Revenue 37,681 32,475 37,030 41,907 18,709
Gross margin 7,945 5,327 5,928 5,963 2,974
EBITDA 1,753 1,076 3,290 2,907 1,278
EBIT 1,282 602 2,714 2,353 1,001
NPBT 902 395 2,355 1,943 917
NPAT 695 (548) 2,224 281 660
Normalisations - 1,081 (154) 735 50
Normalised EBITDA 1,753 2,157 3,136 3,642 1,328
Margins
Gross Margin % 21.1% 16.4% 16.0% 14.2% 15.9%
EBITDA margin % 4.7% 3.3% 8.9% 6.9% 6.8%
Normalised EBITDA margin % 4.7% 6.6% 8.5% 8.7% 7.1%
EBIT margin % 3.4% 1.9% 7.3% 5.6% 5.4%
Source: Send financial statements
59
Commentary:
− In the YTD FY24 results Depreciation & Amortization has not been separated out in
the financial statements. The EBIT figure was reported however, EBITDA for the
period is an estimated figure.
− NZ Mail is Send’s primary revenue generating business, accounting for circa 90% of
total revenue.
− Excluding the decline in FY21 (which we assume was COVID lockdown related)
revenue has been relatively stable since FY20. Revenue is seasonal with sales
typically experiencing a boost in the March to July period each year.
− On a normalised basis earnings have grown over the period. This has primarily been
driven by decreasing expenses as opposed to revenue growth.
− After dropping in FY21 the Gross Margin % ratio has been relatively stable.
− Send’s expenses are primarily related to the provision of its services (i.e. cost of
goods sold), employee costs are the second largest expense item and account for
over 50% of Send’s overheads.
− Subvention payments are excluded from both Reported and Normalised EBITDA.
Over the FY20 – FY23 period circa $4.6m of subvention payments have been made
to other entities in the same tax group (i.e. other companies with the same
shareholder). These payments are the primary reasons for the low reported NPAT
figures in FY21 and FY23.
To assist in valuing Send we have made the following normalisations to the historic reported
results:
− Management fees paid to the shareholder in the FY23 and YTD FY24 periods have
been added back.
− $243,000 has been added to FY23 reflecting one-off shut down costs of G3 medical
− $154,000 has been added to FY23 reflecting expenses from the previous financial
year expensed in FY23.
− Charitable donations have been added back in FY21.
− FY23 saw $138,000 of rental expense incurred. Send prepares its financial
statements in accordance with the IFRS accounting standards so rental costs would
normally be reclassified as leases with the expense showing as a mix of amortisation
and interest (i.e. below EBITDA). The exception is leases with a duration of 12
months or less meaning that this short term rental agreement either won’t be
renewed or will be renewed for a longer period. In both cases it would not be within
Normalised EBITDA so we add this amount back to FY23 reported earnings.
− We understand that in the six months to September 2023 there were some costs
incurred ahead of the RTO process, however, we have not been provided with
details. The effect of adjusting for these expenses would be to increase Normalised
EBITDA in YTD FY24 period.
60
8.5.2 Financial position
A summary balance sheet for Send is presented below the commentary.
Commentary:
− The negative Net working capital balance in FY23 was due to a commitment to
purchase additional inventory which had not been paid for at 31 March 2023. Shortly
after balance date this inventory was paid for with Current Liabilities (i.e. Accounts
Payable) falling and being offset by an increase in bank debt.
− In FY23 Send completed a sale and lease back transaction for its buildings and
property. As an IFRS16 reporting entity the Right of Use assets reflect these assets
with an offsetting amount of Lease Liabilities.
− Net Debt has decreased over time from both Operating Cashflows and the sale of the
property. At 30 September 2023 interest bearing debt comprised of $1.5m of bank
debt and $0.6m of related party debt.
− Loans are primarily from Wilshire Treasury Limited (the funding arm for 2061 LP’s
business interests). It is planned that in conjunction with Completion these advances
will be re-financed directly with ANZ Bank.
Send Statement of Financial Position
As at 31 March FY20 FY21 FY22 FY23 30-Sep-23
NZ$000’s unaudited unaudited audited audited unaudited
Current Assets 6,385 9,863 12,470 11,829 7,820
Current Liabilities (6,042) (9,439) (11,520) (13,416) (5,499)
Net working capital 343 424 950 (1,587) 2,321
Property, Plant & Equipment 5,218 5,074 5,118 212 191
Intangibles 6,211 5,501 6,625 6,297 6,128
Right of Use Assets - - - 1,458 1,325
Total non-current assets 11,429 10,575 11,743 7,967 7,644
Other Non-current Assets /
(Liabilities)
(141) 32 68 226 170
Net operating assets 11,631 11,031 12,761 6,606 10,135
(Cash) / Overdraft (2,408) (2,641) (1,463) (3,133) (445)
Bank Debt 1,000 1,000 1,700 - 1,542
Related Party Debt 6,669 7,690 5,856 1,309 600
Lease Liabilities - - - 1,481 1,367
Net debt 5,261 6,049 6,093 (343) 3,064
Total shareholders' funds 6,370 4,982 6,668 6,949 7,071
Total shareholders' funds &
net debt
11,631 11,031 12,761 6,606 10,135
Source: Send financial statements
61
8.5.3 Cash flows
Statement of Cash Flows - Send Global Limited
FYE 31 March FY20 FY21 FY22 FY23 YTD FY24
NZ$000's unaudited unaudited audited audited
30-Sept
unaudited
Net Operating Cash Flows 5,349 1,468 2,073 5,199 (3,139)
Net Investing Cash Flows (496) (143) (1,760) 6,021 117
Net Financing Cash Flows (4,133) (1,092) (1,491) (9,550) 334
Net Cash Flows 720 233 (1,178) 1,670 (2,688)
Opening Cash 1,688 2,408 2,641 1,463 3,133
Closing Cash 2,408 2,641 1,463 3,133 445
Source: Send financial statements
Commentary:
− With the exception of the YTD FY24 period Send has generated positive operating
cash flows.
− In the period to September 2023 Send was profitable (i.e. NPAT of $0.66 million) but
Net working capital increased by $3.9 million resulting in the negative Operating cash
flows. Working capital is expected to reduce over the balance of FY24 leading to a
reversal of this feature.
− The positive investing cash flow in FY23 is due to the property sale and lease back,
with the proceeds of this transaction largely applied to the repayment of debt.
Financing cash flows primarily reflect the drawing and repayment of debt.
8.6 Valuation of Send Global Limited
8.6.1 Concept of value
The concept of value that we have adopted is one of a market value being the price at which
a willing but not anxious vendor would sell, and a willing but not anxious purchaser would
buy. This assumes both parties are adequately informed of the relevant facts, and neither is
under any compulsion to buy or sell.
We have valued 100% of the shares of Send without explicit regard for any premium for
control nor do we explicitly incorporate any discount to reflect that Send is currently privately
held. While the Transaction is in essence a takeover, our view is that a premium for control
should not be explicitly incorporated in the valuation given that:
− Following the Transaction the Vendors will own 87% of ACE’s Shares, meaning
control is effectively remaining with the current owners.
− ACE’s existing shareholders hold minority positions, and therefore will not receive
any control benefit from the Company’s purchase of Send.
62
8.6.2 Approach to valuation
Valuation methodologies can be distinguished into two general types. The first methodology
is focused on future financial performance and the second on assets realisation. Future
financial performance methodologies generally have a base assumption that the business
will be ongoing, while asset realisation methodologies generally assume the cessation of
trading in its current form.
Future financial performance valuation method include, but are not limited to, a capitalisation
of future maintainable earnings and a DCF:
− A capitalisation of maintainable earnings valuation approach is a common
methodology used in assessing the value of a business like Send. The capitalisation
rate, or valuation multiple, can be derived from share market trading multiples for
similar companies and / or from observed transactions within the sector.
− A DCF valuation is theoretically the best way to value a business. The DCF valuation
assesses the value of the business by discounting its future cash flows at an
appropriate discount rate given the riskiness of the business i.e. the weighted
average cost of capital.
While the DCF approach is generally considered to be the preferred method to value a
business it relies on forecasts of future financial performance. As no prospective financial
information is being provided in the Profile we have assessed the market value of Send
using the capitalisation of earnings approach. As Send has a relatively stable pattern of
earnings and cashflows we are comfortable using this approach and we do not think the
DCF approach would necessarily result in a materially different valuation.
8.6.3 Capitalisation of earnings valuation
Future maintainable earnings
Send FME Estimate
NZ$000's FY23 / FME
Reported EBITDA 2,907
Add back:
Management fees 200
G3 medical close down 243
Timing issues 154
Reclassify rent 138
Total normalisations 735
Normalised EBITDA / FME 3,642
It is preferable that a valuation based on multiples uses an estimate of FME although that
estimate can be based on historic results. Accordingly, and as Send operates in a mature
industry with relatively consistent earnings, we have adopted the last full financial year (i.e.
FY23) as our estimate of FME. We have opted to use FY23 instead of the twelve month
period to September 2023 as, unlike the interim period to September 2023, the FY23 full
year financial statements are audited and include details of the one-off and extraordinary
items that have been adjusted for in our calculation of normalised earnings.
63
We have used EBITDA as our measure of earnings as it excludes the impact of financial
leverage and accounting policies relating to depreciation and amortisation. Our estimate of
FME is $3.61m. A reconciliation of our FME estimate with FY23 Reported EBITDA is
presented in the table below.
Multiples
A capitalisation of earnings approach requires an earnings multiple that is then applied to our
FME estimate. We have reviewed transaction and trading multiples for companies that
operate within the same and similar sectors, which has informed our view on the range of
multiples selected.
As Send’s mail operations is the dominant segment we have focused primarily on global mail
and postal service providers in our multiples analysis. While these companies are not
directly comparable in terms of business operations, we consider that the underlying drivers
and industry conditions are similar enough to Send that the multiples are relevant.
Transaction multiples
There are very few transactions directly involving postal companies, so we have identified
several transactions involving companies from the broader outsourced office solutions
industry which we believe are broadly comparable. Section 13 (Appendix 1) provides
analysis of these transactions.
The transaction multiples, based on multiples of trailing 12 months, or LTM, EBITDA, are
displayed in the chart below. They range from 3.8x to 31.6x, with a median of 8.7x and an
average of 12.8x. Overlaid on the chart is our selected multiple range of 6.75x – 7.75x
(discussed below).
Trading multiples
Our selected listed comparable companies are a range of global postal operators, with the
addition of NZX listed Solution Dynamics (“SDL”) and Freightways. The following chart
-
5.0x
10.0x
15.0x
20.0x
25.0x
30.0x
35.0x
Filebase
OfficeTeam
Finn Clausen
Sikkerhetssystemer
UK Mail Group
CSM Parent
Comparable company transaction EV / EBITDA (LTM) multiples
Lower multipleUpper multiple
Source: S&P CapitalIQ(data as at 8 Jan 2024)
64
shows the multiples as at 8 January 2024 except for SDL which is from 23 August 2023
11
.
Section 14 (Appendix 2) provides further analysis and detail on the comparable company
trading multiples.
The chart above shows EV / EBITDA multiples for the selected comparable companies. This
shows a range of 6.3x to 12.4x with a median of 8.7x and an average 8.8x. Overlaid on the
chart is our selected multiple range of 6.75x to 7.75x (discussed below).
We consider SDL to be the single best listed comparable and have therefore examined its
trading multiples more closely. In the year to August 2023 (i.e. excluding the period impacted
by the potential material customer loss) SDL’s EV / LTM EBITDA multiple ranged from 6.8x
to 9.2x with an average of 7.9x (compared to our selected range for Send of 6.75x to 7.75x).
Selected multiples
To value Send we have adopted an EBITDA multiple range of 6.75x to 7.75x. In selecting
this range we considered:
− A majority of the selected listed companies are significantly larger, more diversified,
and have higher EBITDA margins than Send.
− There are several listed companies which we have placed more reliance on, in
particular SDL, as we view these companies as more comparable to Send.
− In the comparable company transaction multiples we placed much less reliance on
the bottom end of the range (a very small transaction nearly 10 years ago) and the
top end of the range (larger transactions which, presumably, had some level of
synergy for the acquirer).
11
On 17 July 2023 SDL announced that a “very material” customer had informed it that it intended to issue a request for
proposal (RFP) tender for the communications programmes that SDL supplies. While there was minimal immediate impact on
the SDL share price the price fell materially following SDL’s release of its FY24 results, despite those results showing record
results and a solid cash position. We do not consider this more recent trading representative so use SDL’s multiple the day
before the profit announcement.
4.0x
5.0x
6.0x
7.0x
8.0x
9.0x
10.0x
11.0x
12.0x
13.0x
Deutsche Post
DX Group
Singapore Post
Solution Dynamics
Öterreichische Post
UPS
Pos Malaysia Berhad
International
Distribution Services
Freightways
MaltaPost
Comparable company trading EV / EBITDA (LTM) multiples
Lower multipleUpper multiple
Source: S&P CapitalIQ,data as at 8 Jan 2024(except for SDL)
65
− Listed company trading multiples are based on trading for minority shareholdings and
therefore are assumed to implicitly have a minority discount attached to them.
8.6.4 Valuation of Send’s shares
Based on the capitalisation of earnings approach we assess the enterprise value of Send to
be in the range of $24.6 million to $28.2 million.
Send Enterprise Value
NZ$000’s unless otherwise stated Lower Upper
FME 3,642
EV / EBITDA multiple 6.75x 7.75x
Enterprise Value 24,584 28,226
To calculate an equity value for Send’s shares, we deduct the amount of net debt / cash,
including lease liabilities, from the enterprise value. In calculating the net debt position we
have made a pro-forma adjustment to reported debt as at 30 September 2023. In its interim
results Send reported that it was still carrying excess debt from the purchase in April 2023 of
a significant amount of inventory ahead of a NZ Post price increase on 1 July 2023. Send
noted that $3.8 million of that loan had been repaid by 30 September 2023 with the
additional comment “the cash position will continue to improve through the rest of the
financial year as the large inventory purchase is sold down”. We assume that a normalised /
average debt level is $0.5 million lower than reported at September 2023 (i.e. that amount is
added to the value).
Valuation of Send shares
NZ$000's Lower Upper
Enterprise value 24,584 28,226
Debt (2,142)
Cash 445
adj. to Normalised Debt level 500
Lease Liabilities (1,367)
Net Debt at 30 September 2023 (2,564)
Equity value 22,020 25,662
8.6.5 Send Valuation Conclusion
Based on the capitalisation of earnings approach we assess the value of 100% of the shares
of Send to be in the range of $22.0 million to $25.6 million with an average of $23.8
million. This compares to the sale price of $25.0 million which sits within, albeit at the very
top, of our assessed value range.
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9 Profile and Valuation of Being Consultants Limited
9.1 Profile of BCL
BCL is an early-stage business that has recently been formed
12
by several successful
technology entrepreneurs and executives who each have proven track records in multiple
settings. BCL has already launched its business operations and is actively pursuing new
engagements with potential clients. More information can be found at BCL’s website at
https://www.beingconsultants.ai/
9.2 Overview of BCL
BCL seeks to position itself at the cutting edge of digital transformation, specialising in
leveraging AI and EAT to revolutionise business operations. Its core competency is said to
lie in integrating AI into the fabric of business practices, enabling companies to navigate and
excel in the digital era. Being operates in three main areas:
− Being Consultants. Focused on helping clients navigate the complexities of AI and
Web3, providing strategic guidance and implementation.
− Being Ventures. A division dedicated to being a transformation accelerator for early
stage companies that it invests in by providing the capital, scaling support and
operations overhaul. Being Ventures will also look to acquire traditional companies to
implement cutting edge AI / EAT capabilities seeking to transform them into agile
industry leaders.
− Being Labs. The R&D arm, which explores new ventures and looks to develop new
cutting-edge AI technologies.
While BCL is headquartered in Auckland its key employees have substantial international
experience so the company plans to operate on a global basis with an initial focus on NZ,
Australia and Singapore. Expanding into different geographic markets is not without risk or
additional cost (see section 9.4) so Independent ACE Shareholders need to consider the
ability of BCL to successfully undertake expansion into markets other than New Zealand.
9.3 Key people
As a recently established, people based, business the key asset of BCL is its employees.
Brief profiles of BCL’s leadership term are provided below (see the Profile for extra
information):
− David McDonald - Group CEO and Founder. With a background in engineering
and technology spanning two decades, David founded Altered State Machine, which
achieved NZ’s largest seed funding round, comprising the largest piece in the
formation of Futureverse. His expertise in AI and technology development will be
crucial in keeping BCL at the cutting edge of AI advancements.
− Nyssa Waters – CEO. Nyssa’s background includes significant roles at major tech
firms including most recently Google where she was at the forefront of driving digital
transformation. Prior to that Nyssa had several roles at Telstra and Spark NZ.
Nyssa's vision for BCL is centred around harnessing AI to create transformative
12
Being Consultants Limited was incorporated as a company on 30 October 2023.
67
business solutions, and her leadership will be pivotal in positioning BCL as a leader
in AI consultancy.
− Mike Dunshea – Group CFO. Mike is a chartered accountant who qualified with
KPMG in Auckland. He has over 20 years of experience in operations management
and finance both in NZ and offshore. His most recent role is CFO of Send, a position
he has held since 2020.
− Erin Zink – COO. Erin has experience in building effective AI R&D and development
teams. Her expertise lies in operational management and execution, helping to
ensure that BCL's strategic initiatives are effectively translated into tangible client
solutions.
− Nicolas Fourrier – CTO. Nicolas is a data scientist with a PhD in applied
mathematics from the University of Virginia with over 70 published papers in the
specialised fields of predictive analysis, machine learning, inverse problems and
differential equations. With over 15 years industry experience in fields from
aerospace to the metaverse Nicolas will provide BCL the technical leadership as it
seeks to be the leader in this space.
− Paul Shale – Chief Marketing Officer. With his early career in legal, accounting
Paul has more recently worked in senior roles in advertising and growth marketing for
several technology companies across Australasia.
At Completion Date BCL will have 6 FTE. We understand that they are currently negotiating
with third parties in both New Zealand and Australia as either additional employees or as
providers of contracting services. BCL has a pool of contractors it can call upon to provide
specialist contracting support as its’ workflows require. We understand too that BCL has a
strategic relationship with Futureverse who has a large team of researchers and engineers
who could be available on a contracted basis.
9.4 Key business risks
Section 6 in the Profile sets out a description of the key risks relating to the businesses being
acquired. The risks that are considered particularly relevant to BCL are summarised below:
− Reliance on securing significant contracts. The success of Being Consultants is
largely reliant on its ability to grow new customer relationships and develop new
business. There is no guarantee that new contracts for services will be secured
which would have an adverse impact on its ongoing revenues and cashflows.
− Dependence on key personnel. BCL’s operations are heavily reliant on certain key
personnel (in particular David McDonald, Nyssa Waters, and Nicolas Fourrier) and if
any of these key people were to leave its operations and financial performance could
be adversely affected.
− Failure to effectively manage growth opportunities. The Being AI Group intends to
expand organically and through strategic acquisitions. It may not successfully identify
the right opportunities, or manage its growth, which could lead to adverse operational
and financial performance.
− Entry into new geographic markets and verticals. Expansion into new vertical
markets is difficult, and there is a risk that BCL will fail to successfully implement its
strategy in new markets and new verticals.
68
− Significant legal and regulatory changes. There is a risk that legal and regulatory
changes to the AI sector will interfere with the ability of BCL to implement its growth
strategies. This risk is increased by BCL planning on operating within several
different geographic jurisdictions.
9.5 Growth strategies
The current market landscape presents a significant opportunity for AI and digital
transformation services. As businesses across multiple sectors recognize the need to
integrate AI into their operations, the demand for expert consultancy in this field is expected
to grow rapidly. BCL aims to strategically position itself to capitalise on this trend, offering
comprehensive AI solutions that cater to a wide range of industry needs. Specific avenues
for growth for BCL include:
− expanding into professional services (possibly via strategic partnerships)
− additional partnerships with firms specialising in areas such as IT infrastructure,
cloud services, data management and business process optimisation
− broadening its service portfolio and expanding its service offerings, and
− offering an enhanced client value proposition.
9.6 Financial information
We understand that BCL has entered into its first commercial engagements with customers
however, given that it has only existed a few months as a corporate entity there is no
meaningful financial information available. No prospective financial information has been
provided in the Profile.
9.7 Valuation of BCL
In the absence of any financial information, either historic or prospective, we are unable to
use any traditional valuation methods to assess the value of BCL. The inability to prepare a
detailed valuation analysis of BCL means that we are unable to form any definitive
conclusions as to the current value of BCL. Accordingly, to assess the reasonableness of the
price being paid for BCL we have considered:
− pre-money values for seed and other early stage companies, and
− the structure, and price setting dynamics, of the Transaction.
9.7.1 Values for seed and other early stage companies
Given the wide range of data sources including a spread of geographies and timeframes,
definitional issues as to exactly what stage each company is at and the inability to consider
company specific factors it is difficult to draw definitive conclusions from the published
aggregate data outlining the pre-money value at which early-stage companies have raised
new capital.
BCL is a very early-stage business, it is pre-revenue and with no established product or
service in the market. This is not uncommon in venture capital markets which is why
investors, when considering the value of an early-stage business, will typically place greater
emphasis on:
69
− The background, experience and pedigree of the management team
− The potential size, and the competitive dynamics, of the market that the early-stage
business seeks to compete in.
Our assessment is that BCL would rate favourably on the matter of the management team
and the potential size of the market in which it competes. However, our preliminary view is
that the AI market is, or at least will be, relatively competitive with a large number of other
businesses competing in that space.
We have reviewed recent data for angel and seed stage investments in both the NZ and
global markets. There is a wide range of between $0.3 million and $20 million, however, by
excluding the outliers, and generally placing less emphasis on the higher valuations in the
US market, we observed a range of $2 million to $14 million. This compares to the $5 million
price ascribed to BCL in the Transaction.
9.7.2 Price setting in the Transaction
2061, as vendors of both AGE and Send, will be the largest single shareholder in ACE i.e.
excluding any shares issued for the contingent consideration for the purchase of BCL it will
hold 63.9% of the issued capital compared to 2384 at 10.1%. In formulating the Transaction
there was an incentive for the 2061 interests to ensure that the relativity between the price
ascribed to its two businesses and the price for BCL was realistic.
2061 will be better informed as to BCL’s capabilities and prospects, and its abilities to add
value to ACE, and so we think that it is relevant to incorporate 2061’s explicit acceptance of
the BCL price into any assessment of the reasonableness of the Transaction.
9.7.3 BCL valuation conclusion
For the reasons outlined above we have not been able to undertake a detailed valuation
analysis of BCL. We are therefore unable to provide definitive statements as to our
assessment of value. However, to assess the reasonableness of the $5m value ascribed to
BCL we considered:
− The published data on the pre-money values at which a wide range of other early
stage companies have raised money at. We consider that this provides support for
the $5 million price.
− The dynamics of the price setting negotiations in the Transaction. We are unsure of
the precise details how the Transaction was formulated but we do think, that in
assessing the reasonableness of the price being paid for BCL, that 2061’s explicit
acceptance of the price should be considered.
We do not have a valuation range to compare the $5 million with however, on balance, we
consider the price being paid for BCL as within the bounds of what we would consider
reasonable.
This assessment is focused on the initial $5 million price being paid for BCL rather than the
additional Contingent Consideration which may be paid in the future. As detailed in the
following section that consideration is all based on the future share price performance of
ACE and essentially reflects a profit / return sharing arrangement.
70
9.8 BCL price adjustment / Contingent Consideration
There are provisions in the RTO Agreement for an adjustment to the BCL purchase price
linked to the future share price of ACE, to be satisfied via the issue of additional new Shares
to 2384. The key details of the Contingent Consideration are as follows:
− If, in any period between 9 months and 3 years after the Completion Date, the 90
day VWAP of ACE Shares is between $0.04 and $0.05 the BCL purchase price shall
be increased, on a sliding scale, by between $9.333 million and $11.667 million via
the issue of between 373.331 million and 466.66 million additional Shares at an
issue price of $0.025 per Share.
− If, in any period between 18 months and 3 years after the Completion Date, the 90
day VWAP of ACE Shares is between $0.08 and $0.10 the BCL purchase price shall
be increased further, on a sliding scale, by between $9.333 million and $11.667
million via the issue of between 373.331 million and 466.66 million additional Shares
at an issue price of $0.025 per Share.
− If, in any period between 24 months and 3 years after the Completion Date, the 90
day VWAP of ACE Shares is between $0.12 and $0.15 the BCL purchase price shall
be increased further, on a sliding scale, by between $9.333 million and $11.667
million via the issue of between 373.331 million and 466.66 million additional Shares
at an issue price of $0.025 per Share.
− If, in any period up to 3 years after the Completion Date, the 6 month VWAP of ACE
Shares exceeds $0.30 the BCL purchase price shall be increased by a further
$34,999, 800 (less any additional amounts already triggered under the earlier
provisions) and ACE shall satisfy that increased purchase price via the issue of a
further 1,399,992,000 Shares (less any additional Shares already issued under the
earlier provisions) at an issue price of $0.025 per Share.
The following table shows several possible scenarios based on the following assumptions:
− 2384 either being issued no shares in each of the three tranches, being issued the
minimum of 373.33 million shares in each of the tranches or being issued the
maximum of 466.66 million shares at each tranche.
− No additional share issues by ACE, beyond what is directly contemplated in the
Transaction, in the three year period. We make this as a simplifying assumption but
consider it unlikely to be the actual position e.g. the Post Completion Shares could be
issued and 2384’s shareholding would be a lower percentage than shown.
As shown in the table on the following page there is a wide range of possible scenarios
which result in 2384 holding somewhere between 10.06% and 47.23% of the issued capital
13
(i.e. including the Placement Shares but excluding the Post-Completion Shares and the
impact of the exercise of any ESOP Options).
13
There are additional scenarios where 2384 gets issued some, or all of the possible, shares at first tranche but none in any of
the others however it is difficult to show all possible scenarios. If 2384 is issued any Shares in Tranche 1, but nothing in future
tranches, its shareholding would be between 24.3% and 27.2%.
71
ACE Shareholding Levels Including Contingent Consideration for the Purchase of BCL
Independent
ACE Share-
holders
Joyce and
associates
Other
(incl.
former)
directors
Placement
Share-
holders
2061 LP Te
Turanga
Ukaipo
2384
LP
Total
Post Settlement shareholdings (excl. ESOP Options)
No. of
Shares
16.86 116.06 15.11 120.00 1,270.00 250.00 200.00 1,988
% of
Total
0.85% 5.84% 0.76% 6.04% 63.88% 12.58% 10.06% 100%
No. of Shares Issued Under Each Tranche
Low
- - - - - - 373.33 373
High
- - - - - - 466.66 467
End Position: Based on Number Issued in Each of Three Tranches (No. of Shares)
Nil
16.86
116.06
15.11 120.00 1,270.00 250.00 200.00 1,988
Low
16.86
116.06 15.11
120.00 1,270.00 250.00 1,319.99 3,108
High
16.86
116.06 15.11
120.00 1,270.00 250.00 1,599.99 3,388
End Position: Based on Number Issued in Each of Three Tranches (% of Total)
Nil 0.85% 5.84% 0.76% 6.04% 63.88% 12.58% 10.06% 100%
Low 0.54% 3.73% 0.49% 3.86% 40.86% 8.04% 42.47% 100%
High 0.50% 3.43% 0.45% 3.54% 37.49% 7.38% 47.23% 100%
The largest dilution occurs to 2061, as the largest single shareholder, as its shareholding
could be diluted from 63.9% down to 37.5% although the combined shareholding of the
Vendors (i.e. 2061 and 2384) and Te Turanga Ukaipo could rise from 86.5% to 92.1%.
The numbers involved are large but it is necessary to consider the potential share issues in
context. If the ACE share price increases to $0.15 in the next three years 2384 could be
issued up to 1.40 billion new Shares, which would be worth $210 million. Assuming that
many were issued, ACE would have at least 3.39 billion Shares on issue with a market
capitalisation of at least $508 million and the ACE share price would be at least 6x higher
than the Share Issue Price and at least 10x higher than the last traded price in October
2023. There can be no assurance that the ACE share price will increase to be at least 6x
higher than the Share Issue Price or any other multiple. However, the structure of the
Contingent Consideration has been designed to seek to align the interests of 2384 with the
interests of all other shareholders.
As shown in the table on the next page, which considers the situation in 3 years’ time (i.e. at
the time of the calculation of the third tranche of Earn-In Shares) our analysis indicates that
2384 could effectively receive up to 31.4% of the total gross value added to the Company
over the three year period.
It is difficult to benchmark this figure against anything directly comparable however we note
that the management agreements for private equity and venture capital funds, which BCL
could be considered as being broadly analogous to, typically provide for up to around 20% of
the value added to their portfolios. However, there are some important differences in those
agreements compared to the Contingent Consideration:
− The Contingent Consideration is calculated over a fixed, and finite, time frame vs.
the evergreen nature of most management agreements.
− The Contingent Consideration is linked to net returns not gross returns like most
management agreements, which does make the criteria relatively harder to achieve.
72
For example, if the share price was on the cusp of a trigger point (e.g. just below
$0.12 in 24 months’ time) any further share price gains could be expected to make
explicit allowance for the potential share issue and subsequent dilution of all
shareholders other than 2384, thus limiting share price gains at that time and making
achievement of the Contingent Consideration hurdle that much harder.
Analysis of Contingent Consideration
NZ$m unless specified
Price (in 3 years, at Calculation of 3
rd
Tranche) $0.150
Immediately Prior to the Issue of Tranche 3 Consideration
Number of Shares on Issue Including Tranches 1 & 2 2,921 million
Market Capitalisation 438.2
Contingent Consideration (Tranche 3)
Value 11.7
Number of Shares (Issued at $0.025) 466.7 million
Immediately After the Issue
Number of Shares on Issue 3,388 million
Market Capitalisation 508.2
Total (Cumulative) Amount of Contingent Consideration
Number of Earn-In Shares Issued 1,400 million
Value of Earn-In Shares Issued 210.0
Increase in Market Capitalisation (Future Date vs. at Completion Date) 458.3
Total Gross Value Add 668.3
2384’s Share of Total Gross Value Add 31.4%
Notwithstanding these differences we do, in isolation, consider 31% to be an unreasonably
high proportion of the potential value gains. However, Independent ACE Shareholders need
to balance that against:
− the likelihood of achieving the various share price hurdles
− the return, versus the current Share price, that any issue to 2384 would imply to the
value of their current holding, and
− the majority of the dilution coming from 2061’s shareholding.
Armillary’s view is that while in isolation the Contingent Consideration is an unfairly high
proportion of the potential value added to the business, when considered in the wider
context of the Transaction it is reasonable.
73
10 Reasonableness of the Share Issue Price
10.1 Basis of establishing the share issue price
Each of the separate elements of the Transaction is linked to the same Share price. In total
the Business Acquisition Allotments, the Debt Capitalisations and the Placement will result in
1,966,520,000 new Shares being issued. The Business Acquisition Allotments and the Debt
Capitalisations are to be done at the Share Issue Price of $0.025 and the Placement is to be
undertaken at a price not less than the $0.025 Share Issue Price.
The Company has advised us that the price of $0.025 was based on the last price that
Shares were issued at and was then accepted as a negotiated value with both 2061 and
McDonald. In the Board’s view it is a fair representation of the value of ACE as an NZX listed
shell company in the context of the Transaction.
10.2 Assessment of the reasonableness of the share issue price
We have considered the reasonableness of the Share Issue Price of $0.025 per Share with
respect to:
− the prices at which the Company has issued new Shares in the past
− the prices at which the Company plans to issue new Shares as part of the
Transaction
− the prices from recent Share trading on the Main Board of the NZX, and
− an adjusted Net Asset Value of the Shares
10.3 Past share issues
Since its name change to Ascension Capital in July 2020 ACE has undertaken three share
placements raising a collective total amount of circa $214,000. On a post Share
Consolidation basis the weighted average issue price has been $0.0262 with the most
recent issue, in April 2023, at $0.029.
ACE Share Issues (July 2020 onwards)
Pre-share Consolidation Post-share Consolidation
1
NZ$000‘s
Raised
Number Issue Price Number Issue Price
10 July 2020 333,177,621 $ 0.000250 3,331,776 $0.0250
83
13 November 2020 249,000,000 $ 0.000250 2,490,000 $0.0250
62
17 April 2023
2,350,000 $0.0290
68
Total / Weighted Average
8,171,776 $0.0262 214
1
Calculated on a 100:1 basis
The Share Issue Price is marginally below the weighted average price of Shares issued over
the period, it is below the price of the most recent issue but equal with the price of the initial
Share issues in 2020.
Considering this factor in isolation we consider the Share Issue Price to be reasonable from
the perspective of the Independent ACE Shareholders.
74
10.4 Share Issues as part of the Transaction
Aside from the Shares being issued to 2061, Te Turanga Ukaipo and 2384 as consideration
for the Business Acquisitions the RTO Agreement details how the Transaction is conditional
upon the issue of new Shares to the following parties:
− Joyce, pursuant to the Excalibur Debt Capitalisation and the Joyce Allotment (for the
purchase of 13.3% of AGE), and
− other current (and one former) ACE directors, pursuant to the Directors’ Fees
Capitalisation.
While the Transaction is not conditional upon the Placement if the Placement is completed it
would introduce new investor shareholders on to the Company’s Share register.
We consider that each of these components, in particular the Placement if it is undertaken,
provides an element of external and / or independent validation that the Share Issue Price is
a reasonable price for the Shares.
10.5 Share trading
As shown in section 6.8 trading of ACE shares on the NZX is thin and sporadic. Over the
course of 2023 there have only been seven trades with a total turnover of just under 300,000
shares or 1.39% of the total Shares on issue.
Over that period the Share price has steadily fallen from an initial trade (in April 2023) at
$0.035 per Share to the most recent trade (in October 2023) at $0.015 per Share. The
VWAP over the last 12 months is $0.020.
The Share Issue Price is well above the last traded price of the Company’s Shares and
above the VWAP of the last 12 months. While trading of the Shares on the Main Board of the
NZX is thin, and not a factor that we place an undue level of reliance on, we do consider the
Share Issue Price is reasonable when compared to recent Share trading.
10.6 Adjusted net assets per Share
At 30 September 2023 ACE’s Net Tangible Assets (“NTA”), as represented by the Total
Equity in the Company’s balance sheet, was negative $818,000 or negative $0.0381 per
Share. If the amounts owing to Excalibur and the Directors (including van Wijk) at that date,
being $482,016 and $354,999 respectively, had been capitalised (in line with what is
proposed as part of the Transaction) NTA would have been positive $18,000 or $0.0003 per
Share.
The Company’s only material intangible asset is its NZX Main Board listing. In broad terms
the value attributable to an NZX Main Board listing is a factor of the avoided costs from a
business using an RTO to get a listing rather than undertaking an Initial Public Offering
(“IPO”) or a compliance listing.
While the implied value is difficult to accurately isolate our analysis of recent backdoor
listings and reverse listings suggests they have implicitly ascribed a value of between $0.25
million and $0.75 million to a NZX Main Board listing and this is the range have adopted in
our analysis of ACE.
75
Added to ACE’s reported NTA at 30 September 2023 this still results in a negative Net Asset
Value (“NAV”) of between negative $69,000 and negative $569,000 or negative $0.0032 to
negative $0.0264 per Share.
Although the Debt Capitalisations form elements of, and are conditional upon, the
Transaction being implemented the following table shows the impact on the NAV position if
the Debt Capitalisations had been undertaken at 30 September 2023. Note that this table is
based on capitalising the amount of debt outstanding at that time. In the period up until
Completion there will be additional directors’ fees capitalised and Excalibur will advance the
Company more funds to cover its normal operating expenses and the costs of implementing
the Transaction.
Adjusted Net Asset Value of ACE Shares
Total ($'000) per Share ($)
Low High Low High
Net Assets as at 30 September 2023
(819) (819) (0.0381) (0.0381)
Value of NZX Main Board Listing
250 750 0.0116 0.0349
Adjusted NAV (pre Debt Capitalisations)
(569) (69) (0.0264) (0.0032)
Debt Capitalisations
837 837
Adjusted NAV of ACE Shares
268 768 0.0049 0.014
This analysis suggests that the value of the ACE Shares, prior to the Transaction (albeit
incorporating some elements of it), and in the absence of any alternative transaction, is
between $0.0049 and a maximum of $0.014 per Share.
The Share Issue Price of $0.025 per Share implies a value of $1.36 million for ACE’s NZX
Main Board listing as at 30 September 2023. Based on the estimated values at Completion
Date the implied value for the Main Board listing is closer to $1.68 million which is above our
estimate of the value of a listing implied in other RTO transactions. Accordingly, from the
point of view of the Independent ACE Shareholders, we consider the Share Issue Price to be
fair and reasonable relative to values based on ACE’s NTA and Adjusted NAV.
10.7 Conclusion
We assess that the Share Issue Price, being the common price to be used in each separate
element of the Transaction, is:
− broadly in line with the price that the Company has previously undertaken Share
issues
− the same price as Shares are being issued to other parties, independent of the
Business Acquisitions, as part of the Transaction
− at a premium to the price at which the Shares have recently traded at on the NZX
Main Board, and
− at a material premium to an assessed per Share value, on either an NTA or Adjusted
NAV basis.
Accordingly, we consider that the Share Issue Price is fair to the Independent ACE
Shareholders.
76
11 Sources of Information, Reliance on Information, Disclaimer and
Indemnity
11.1 Sources of information
The statements and opinions expressed in this Report are based on the following primary
sources of information:
− Reverse Listing Agreement in respect of Send, AGE, Being and ACE (i.e. the RTO
Agreement)
− Due Diligence Report Prepared for Ascension Capital Limited in respect of the AI
Industries Initiative (dated 23 November 2023)
− Draft versions of the Notice of Special Meeting and Listing Profile
− ACE FY20, FY21, FY22, and FY23 annual reports and ACE interim reports covering
1HFY21 to 1HFY24
− AGE special purpose financial statements for FY21 and FY22 plus financial
statements for the 9 month period ending 30 September 2023
− Send annual financial statements for FY21, FY22 and FY23 plus interim financial
statements for 1HFY24
− ACE Share Register as at 6 December 2023
− ACE Annual Meeting materials for years 2020 - 2023
− ACE NZX announcements
− Companies Office filings, and
− S&P Capital IQ.
During the course of preparing this Report, we have had correspondence and discussions
with and / or received information from the Company and its legal advisers.
The Board has confirmed that, for the purpose of this Report, we have been provided with all
information relevant to the Company and the proposed Transaction that is known to them
and that all the information provided is true and accurate in all material aspects and is not
misleading by reason of omission or otherwise.
Including this confirmation, we have obtained all the information that we believe is necessary
for the purpose of preparing this Report.
In our opinion, the information to be provided by ACE to the Independent ACE Shareholders
is sufficient for them to understand all relevant factors and to make an informed decision in
respect of the Transaction and the Transaction Resolutions.
11.2 Reliance on information
In preparing this Report we have relied upon and assumed, without independent verification,
the accuracy and completeness of all publicly available information along with all of the
information that was provided to us by ACE and its advisers.
77
We have evaluated that information through analysis, enquiry and examination for the
purposes of preparing this Report, but we have not verified the accuracy or completeness of
any such information or conducted an appraisal of any assets. We have not carried out any
form of due diligence or audit on the accounting or other records of ACE. We do not warrant
that our enquiries would reveal any matter which an audit, due diligence review or extensive
examination might disclose.
11.3 Disclaimer
We have prepared this Report with care and diligence and the statements in the Report are
given in good faith and in the belief, on reasonable grounds, that such statements are not
false or misleading. However, in no way do we guarantee or otherwise provide any warranty
or representation that any forecasts of future profits, cash flows or the financial position of
ACE will be achieved. Forecasts are inherently uncertain. They are predictions of future
events that cannot be assured. They are based upon assumptions, many of which are
beyond the control of ACE, its directors and management. Actual results will vary from the
forecasts and these variations may be significantly more or less favourable.
We assume no responsibility arising in any way whatsoever for errors or omissions
(including responsibility to any person for negligence) for the preparation of this Report to the
extent that such errors or omissions result from our reasonable reliance on information
provided by others or assumptions disclosed in this Report or assumptions reasonably taken
as implicit, provided that this shall not absolve Armillary from liability arising from an opinion
expressed recklessly or in bad faith.
Our evaluation has been arrived at based on economic, exchange rate, market and other
conditions prevailing at the date of this Report. Such conditions may change significantly
over relatively short periods of time. We have no obligation or undertaking to advise any
person of any change in circumstances which comes to our attention after the date of this
Report or to review, revise or update the Report.
We have had no involvement in the preparation of the Notice of Special Meeting and have
not verified or approved the contents of that notice. We do not accept any responsibility for
the contents of the Notice of Special Meeting except for this Report.
11.4 Indemnity
ACE has agreed that to the extent permitted by law, it will indemnify Armillary and its
directors and employees in respect of any liability suffered or incurred as a result of or in
connection with the preparation of this Report. This indemnity does not apply in respect of
any negligence, wilful misconduct or breach of law. ACE has also agreed to indemnify
Armillary and its directors, employees and consultants for time incurred and any costs in
relation to any inquiry or proceeding initiated by any person. Where Armillary or its directors,
employees and consultants are found liable for or guilty of negligence, wilful misconduct or
breach of law or term of reference, Armillary shall reimburse its fees for preparing this
Report.
78
12 Qualifications and Expertise, Independence, Declarations and Consents
12.1 Qualifications and expertise
Armillary is a specialist New Zealand based investment banking, funds management,
financial training and advisory firm. It provides a range of services including the preparation
of valuations, merger and acquisition advice, capital raising and due diligence. Its client base
includes a range of small to medium sized private and listed companies, iwi organisations
and government agencies.
The individuals responsible for preparing this Report are Geoff Davis (BCom, ACA), David
Wallace (BCom, Dip Bus Fin), and Jansson Ford (BCom, MFINC).
Geoff Davis has over 30 years of experience in investment markets with an emphasis on
corporate finance, equity capital markets and all aspects of M&A. Prior to joining Armillary
Private Capital, Geoff has worked at TeamTalk (now named Vital), Active Equities, Brierley
Investments and National Mutual / AXA Funds Management. Geoff holds a Bachelor of
Commerce degree from the University of Auckland and is an ACA member of Chartered
Accountants Australia and New Zealand.
David Wallace is a founding director of Armillary and is active across the Investment
Banking, Funds Management and Advisory areas of the firm. He has a background in
investment banking, investment analysis and corporate treasury, with over 30 years’
experience working in capital markets in New Zealand. David holds a Bachelor of Commerce
degree from Canterbury University and a Post Graduate Diploma in Business Finance from
the Auckland University Graduate School of Business.
Jansson Ford is a Senior Analyst at Armillary and has been with the firm since July 2022. He
holds a Masters of Finance from the University of Otago and a Bachelor of Commerce
degree from the University of Otago.
12.2 Independence
Armillary does not have at the date of this report, and has not had, any shareholding in or
other relationship with ACE, AGE, Send, 2061 or Being, or any other conflicts of interest, that
could affect our ability to provide an unbiased opinion in relation to the Transaction or the
preparation of this Report.
Armillary has not had any part in the formulation of the Transaction nor any aspects thereof.
Our sole involvement has been the preparation of this Report.
Armillary will receive a fixed fee for the preparation of this Report. This fee is not contingent
on the conclusions of this Report or the outcome of the voting in respect of the Transaction
Resolutions. Armillary will receive no other benefit from the preparation of this Report.
Armillary does not have any conflict of interest that could affect its ability to provide an
unbiased Report.
12.3 Declarations
This Report is dated 11 March 2024 and has been prepared by Armillary at the request of
the Independent Directors to fulfil the reporting requirements of the Takeovers Code and
NZX Listing Rules. This Report, nor any part of it, should not be reproduced or used for any
other purpose.
79
Armillary specifically disclaims any obligation or liability to any party whatsoever in the event
that the Report is supplied or applied for any purpose other than that for which it is intended.
Advance drafts of the Report were provided to the board and its legal advisers. Certain
changes were made to the Report as a result of the circulation of the drafts. However, there
was no material alteration to any part of the substance of this Report, including the
methodology or conclusions as a result of issuing the drafts.
Our terms of reference for this engagement did not contain any term that materially restricted
the scope of the Report.
12.4 Consents
Armillary consents to the issuing of this Report in the form and context in which it is to be
included with the ACE Notice of Special Meeting to be sent to ACE shareholders. Neither the
whole nor any part of this Report, nor any reference thereto may be included in any other
document without our prior written consent as to the form and context in which it appears.
Yours faithfully,
Geoff Davis David Wallace
Director Joint Managing Director
Armillary Limited Armillary Limited
Appendix | 80
13 Appendix 1 – Send Global Limited: Comparable Companies Transaction
Multiples
Send Comparable Company / Sector Transaction LTM EBITDA Multiples
Target Acquirer Date Multiple Transaction Size ($m)
Reported Indic. NZ$
Filebase Limited Restore plc May-14 3.8x GBP 0.4
0.8
OfficeTeam Limited BECAP12; Better
Capital PCC
Jul-14 6.2x GBP 80.0
160
Finn Clausen
Sikkerhetssystemer
AS
Hiddn Solutions ASA Apr-17 8.7x NOK 11.8
2
UK Mail Group
Limited
Deutsche Post AG Sep-16 13.7x GBP 250
500
CSM Parent, Inc. Clinigen Group plc Sep-18 31.6x USD 240
384
Min
3.8x
25th percentile
6.2x
Median
8.7x
Average
12.8x
75th percentile
13.7x
Max 31.6x
Source: S&P Capital IQ (data as at 8 Jan 2024)
Filebase Limited provides information management services. The company offers
documents and records management, tape management, archiving, scanning, shredding
and destruction, recycling, lifecycle management, and consultancy services; and online
back-up, courier, and self-storage services. It serves legal, health, pharmaceutical, financial,
education, and public sector industries; and small businesses. The company was founded in
1996 and is based in Morpeth, United Kingdom.
OfficeTeam Limited supplies office stationery. The company offers office essentials, writing
instruments, pads and books, papers, envelopes, computer accessories, business
machines, and electronic office supplies; postroom, labelling, filing, desktop organization,
conference and presentation, catering, cleaning and hygiene, waste management, health,
safety and security, PPE and workwear, premises and maintenance, furniture, legal, and
index products. It also provides print management products, data archive solutions, office
furniture, and managed print services; workplace products that comprise cleaning and
hygiene, first aid, health, safety and security, catering, and premises and maintenance
products; workwear, such as personal protective equipment, corporate business wear, sports
and leisure wear, catering clothing, and healthcare garments; legal and professional
services; and tail management services. The company serves blue-chip organizations, and
small and independent companies across various industry sectors, including retail, finance,
legal, care, hospitality, and public sectors. OfficeTeam Limited was formerly known as OSGH
LIMITED and changed its name to OfficeTeam Limited in July 2009. The company was
incorporated in 1888 and is based in Croydon, United Kingdom with additional offices across
the United Kingdom.
81
Finn Clausen Sikkerhetssystemer AS manufactures and distributes storage and security
solutions, such as cabinets, drawers, ballot boxes, racks, and vaults. The company was
founded in 1996 and is headquartered in Oslo, Norway.
UK Mail Group Limited provides express parcels and mail collection, and delivery services
in the United Kingdom and internationally. It operates through Parcels and Mail segments.
The company engages in the business-to- business, business-to-consumer, international
parcel delivery service and courier operations. It also offers ipostparcels pro, a Web-based
dispatch solution; ipostparcels, a next day collection and delivery service to the U.K. and
approximately 160 countries; and international Air Express service that offers dispatch to
approximately 200 countries for urgent and time-sensitive documents and parcels and Road
Express that provides a way of sending non urgent goods over land to approximately 30
countries, as well as provides courier and logistics services. In addition, the company
provides postal services carrying unsorted mail, sorted mail, international mail, returned mail,
and mail dispatch system services for customers, primarily in the financial, publishing, retail,
and utility sectors. UK Mail Group plc serves banks, supermarkets, telecommunication
businesses, government, mid-range and small independent companies, and sole traders. UK
Mail Group Plc was founded in 1971 and is based in Slough, the United Kingdom.
CSM Parent, Inc. provides packaging, labelling, warehousing, and distribution services. The
company was founded in 2016 and is based in Wilmington, Delaware.
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14 Appendix 2 – Send Global Limited: Comparable Companies Trading
Multiples
Send Comparable Company Trading Multiples
Company name
Market cap
(NZ$m)
Revenue
(NZ$m)
EV / LFY
EBITDA
EV / LTM
EBITDA
Deutsche Post 92,540 148,761 5.9x 6.8x
DX Group 580 977 6.3x 6.3x
Singapore Post 1,261 2,120 7.2x 7.8x
Solution Dynamics 23 40 7.5x 7.5x
Öterreichische Post 3,874 4,714 7.7x 7.5x
UPS 216,010 154,763 7.9x 9.7x
Pos Malaysia Berhad 135 665 8.0x 10.3x
International Distribution Services 5,265 24,763 8.9x 12.4x
Freightways 1,519 1,122 10.1x 10.1x
MaltaPost 64 70 9.7x 9.7x
Min 23 40 5.9x 6.3x
25Q 246 743 7.3x 7.5x
Median 1,390 1,621 7.8x 8.7x
Average 32,127 33,800 7.9x 8.8x
75Q 4,917 19,751 8.7x 10.0x
Max 216,010 154,763 10.1x 12.4x
Source: S&P Capital IQ (data as at 8 Jan 2024)
Deutsche Post AG operates as a mail and logistics company in Germany, rest of Europe,
the Americas, the Asia Pacific, the Middle East, and Africa. The company operates through
five segments: Express; Global Forwarding, Freight; Supply Chain; eCommerce Solutions;
and Post & Parcel Germany. The Express segment offers time-definite courier and express
services to business and private customers. The Global Forwarding, Freight segment
provides air, ocean, and overland freight forwarding services; and offers multimodal and
sector-specific solutions. This segment’s business model is based on brokering transport
services between customers and freight carriers. The Supply Chain segment delivers
customized supply chain solutions to its customers based on modular components, including
warehousing and transport services; and value-added services, such as e-fulfilment,
omnichannel solutions and returns management, lead logistics partner, real estate solutions,
service logistics, and packaging solutions for various industrial sectors. The eCommerce
Solutions segment provides parcel delivery and cross-border non-time definite international
services. The Post & Parcel Germany segment transports and delivers mail communication,
parcels, physical and hybrid letters, and special products for the delivery of goods; and offers
additional services, such as registered mail, cash on delivery, and insured items. Deutsche
Post AG was founded in 1490 and is headquartered in Bonn, Germany.
DX (Group) plc, through its subsidiaries, provides parcel, freight, secure courier, and
logistics services in the United Kingdom and Ireland. The company operates through two
segments, DX Freight and DX Express. The DX Freight segment comprises DX 1-Man, DX
2-Man and Logistics; and collects and delivers larger and heavier products, including
irregular dimensions and weight to business and residential addresses nationwide. The DX
Express segment comprises DX Parcels and DX Exchange and Mail; offers collection and
83
express delivery of time sensitive, mission critical, and high value items for B2B and B2C
customers; and trusted members network that provides secure and reliable next-day service
for the delivery of mail, documents, and medical specimen to and from other members. It
serves customers in agriculture, automotive, electrical, financial, home and garden,
industrial, legal, optical, pharmaceutical, print, public sector, retail, textiles, and white goods
industries. DX (Group) plc was founded in 1975 and is headquartered in Datchet, the United
Kingdom.
Singapore Post Limited, together with its subsidiaries, engages in post and parcel,
eCommerce logistics, and property businesses in Singapore, Japan, Europe, New Zealand,
Hong Kong, Australia, and internationally. It operates through three segments: Post and
Parcel, Logistics, and Property. The Post and Parcel segment offers services for collecting,
sorting, transporting, and distributing domestic and international mail, as well as sells
philatelic products. This segment also provides agency, financial, and parcel delivery
services. The Logistics segment offers freight forwarding and eCommerce logistics solutions,
which includes front-end related eCommerce solutions, warehousing, fulfilment, delivery,
and other value-added services. The Property segment provides commercial property rental,
and self-storage services, as well as management, and advertising and promotion services.
The company is involved in the online sale of products; and offers management and
consultancy services, as well as integrated supply chain and distribution services, and
logistics consulting services. It also provides customs brokerage services; freight collections
transshipments services; management and system support related services; and financial
and treasury services. In addition, the company offers online shopping platforms and
services. Singapore Post Limited was founded in 1819 and is headquartered in Singapore.
Solution Dynamics Limited provides customer communication solutions in New Zealand,
Australia, Europe, and the United States. The company offers customer communication
management (CCM) software as a service platform designed to meet and manage
organizational customer communication needs, as well as manages cross-border print and
mail solution delivery requirements. It also provides customer communications cloud
solutions, including workflow and integration, digital and print multi-channel distribution,
distributed print integration, digital asset management, digital and print campaign
optimisation and management, document scanning, workflow and archiving, artificial
intelligence applied to document enhancement, document composition and hyper-
personalisation, desktop digital mail centre User Interface, data quality and enhancement,
and dashboards and analytics. In addition, the company offers digital printing and mail house
processing services; and outsourced services, such as well as envelope printing and
postage services. Solution Dynamics Limited was founded in 1996 and is based in Auckland,
New Zealand.
Österreichische Post AG, together with its subsidiaries, provides postal and parcel
services in Austria, Türkiye, Germany, and internationally. It operates in three divisions: Mail,
Parcel & Logistics, and Retail & Bank. The Mail division engages in the distribution,
collection, sorting, and delivery of letters and document shipments, addressed and
unaddressed direct mail, and newspapers and magazines, as well as online services, such
as e-letter and cross-media solutions; and physical and digital services in customer
communications and document processing. The Parcel & Logistics division offers solutions
for parcel and express mail items; and value-added services, including food delivery,
warehousing, order picking, returns management, and web shop logistics and infrastructure,
as well as cash transportation services. The Retail & Bank division is involved in the
provision of telecommunication products and merchandise; postal, financial, and payment
transaction services; and self-service solutions, such as pick-up and drop-off stations at
various locations. The company is headquartered in Vienna, Austria. Oesterreichische Post
AG is a subsidiary of Österreichische Beteiligungs AG.
84
United Parcel Service, Inc., a package delivery company, provides transportation and
delivery, distribution, contract logistics, ocean freight, airfreight, customs brokerage, and
insurance services. It operates through two segments, U.S. Domestic Package and
International Package. The U.S. Domestic Package segment offers time-definite delivery of
letters, documents, small packages, and palletized freight through air and ground services in
the United States. The International Package segment provides guaranteed day and time-
definite international shipping services comprising guaranteed time-definite express options
in Europe, Asia, the Indian sub-continent, the Middle East, Africa, Canada, and Latin
America. The company also provides international air and ocean freight forwarding, post-
sales, and mail and consulting services. In addition, it offers truckload brokerage services;
supply chain solutions to the healthcare and life sciences industries; financial and
information services; and fulfilment and transportation management services. United Parcel
Service, Inc. was founded in 1907 and is headquartered in Atlanta, Georgia.
Pos Malaysia Berhad provides postal and parcel services in Malaysia and internationally.
The company operates through three segments: Postal, Aviation, and Logistics segments. It
receives and dispatches postal articles; offers postal financial services; deals in philatelic
products; and sells postage stamps. The company also offers postal services, such as basic
mail services for corporate and individual customers; courier, parcel, and logistics solutions
by sea, air, and land to national and international destinations; mailroom management, direct
mail, and over-the-counter services for payment of bills; various financial products and
services; and direct entry and transshipment services, as well as operates SendParcel, an
online shipping platform, which offers domestic and international courier services. In
addition, it provides cargo and ground handling, in-flight catering, freight and forwarding, air
cargo transport, haulage, shipping agency and chartering, storage and safekeeping,
warehousing and distribution, data and document processing, custom forwarding agent,
consultant and agent marketing, aircraft maintenance and engineering, inventory, and
distribution services. Further, the company engages in the provision of internet security
products, solutions, and services; buying and selling of investment precious metals, such as
gold bars and dinars; document printing and insertion services for mailing; licensing of digital
certification authority; property investment; Islamic pawn broking; insurance agency; and
distribution park business. Pos Malaysia Berhad is based in Kuala Lumpur, Malaysia.
International Distributions Services plc, together with its subsidiaries, operates as a
universal postal service provider in the United Kingdom and internationally. The company
offers parcels and letter delivery services under the Royal Mail and Parcelforce Worldwide
brands. It also provides services for the collection, sorting, and delivery of parcels and
letters. In addition, the company operates ground-based parcel delivery networks in Europe
that covers 40 countries and nation states. Further, it provides express parcel delivery and
logistics services. Additionally, the company engages in property holdings and facilities
management activities. It serves consumers, and small and medium-sized enterprises. The
company was formerly known as Royal Mail plc and changed its name to International
Distributions Services plc in October 2022. International Distributions Services plc was
founded in 1516 and is based in London, the United Kingdom.
Freightways Group Limited, together with its subsidiaries, provides express package and
business mail services in New Zealand, Australia, and internationally. It operates through
Express Package & Business Mail, Information Management, and Corporate and Other
segments. The company provides network courier services under the New Zealand
Couriers, Post Haste Couriers, Castle Parcels, and NOW Couriers brands; and point-to-point
courier services under the SUB60, Kiwi Express, Stuck, and Security Express brands. It also
provides mail delivery services under the DX Mail brand; and mailhouse-print services and
digital mail presentation platforms under the Dataprint brand. In addition, it provides a range
of physical storage and information management, as well as digital information processing
services, such as digitalisation, business process outsourcing, online back-up, and
85
eDiscovery services, as well as document destruction and medical waste services primarily
under the Shred-X and Med-X brands, as well as operates line-haul on the arterial roads
under the Parceline Express name. Further, the company offers general and aviation
engineering services; and aviation-related, IT infrastructure support, treasury management,
and financing and property management services. The company was formerly known as
Freightways Limited and changed its name to Freightways Group Limited in March 2023.
The company was founded in 1964 and is based in Penrose, New Zealand.
MaltaPost p.l.c. provides postal and related retail services to individuals and businesses in
Malta and internationally. The company offers local, international, registered, direct, and bulk
mail services, as well as mail pickup and delivery services; and PO boxes. It also provides
private posting box, mail forwarding, parcel post, local and international courier, payment
collection, express, poste restante, redirection of mail, temporary mail custody, bill payment,
money order, money transfer, cheque encashment, income tax payment, bulk posting, and
business reply services, as well as photocopy bureau services. In addition, the company
offers postage and personalized stamps; philatelic items, gift vouchers, postage paid
envelopes, telephone and mobile cards, stationery products, and corporate gifts; and other
financial services. Further, it provides business support services, including document
management, back office task outsourcing, door to door marketing, shredding, response
management, logistics, warehousing, insurance agent, and data collection services, as well
as Web services for online shopping. The company was incorporated in 1998 and is
headquartered in Marsa, Malta. MaltaPost p.l.c. is a subsidiary of Redbox Limited.
86
15 Appendix 3 - AGE Limited: Comparable Companies Financial Information
& Trading Multiples
Using CapIQ we undertook a company screening review using the following criteria:
− publicly listed companies
− with primary geographic location in any of USA, Canada, European developed
markets or Asia/Pacific developed markets, and
− with ‘Schools’ as a primary industry classification.
The initial data set was then filtered to exclude companies where the full information was not
available. The following is a list of the companies included in our sample.
AcadeMedia AB (publ) operates as an independent education provider in Sweden, Norway,
the Netherlands, and Germany.
Academies Australasia Group Limited provides training and education services in
Australia and Singapore.
American Public Education, Inc., together with its subsidiaries, provides online and
campus-based postsecondary education and career learning.
Aoba-BBT, Inc. operates in the educational business in Japan.
Aprendere Skolor AB (publ), together with its subsidiaries, owns and operates schools in
Sweden.
Benesse Holdings, Inc. provides educational, and nursing care and childcare services in
Japan and internationally.
BExcellent Group Holdings Limited, an investment holding company, provides private
supplementary secondary school education services in Hong Kong.
Bradaverse Education (Int'l) Investments Group Limited, an investment holding
company, provides private educational services in Hong Kong.
Bright Horizons Family Solutions Inc. provides early education and childcare, back-up
care, educational advisory, and other workplace solutions services for employers and
families.
Cedergrenska AB (publ) provides preschool and post-secondary education services.
China Education Group Holdings Limited, an investment holding company, operates
private higher and secondary vocational education institutions.
CLIP Corporation engages in the education and sports businesses in Japan.
Daekyo Co., Ltd. provides educational services for children worldwide.
Digital Daesung Co., Ltd. provides online and offline educational services.
EDU Holdings Limited, through its subsidiaries, provides tertiary education services in
Australia.
87
EpicQuest Education Group International Limited, through its subsidiaries, provides
education solutions for students interested in college and university programs in the United
States, Canada, and the United Kingdom.
Genius Group Limited, through its subsidiaries, provides entrepreneur education system
business development tools and management consultancy services to entrepreneurs and
entrepreneur resorts.
GOLD&S Co.,Ltd engages in education business in South Korea.
Graham Holdings Company, through its subsidiaries, operates as a diversified education
and media company in the United States and internationally.
Ichishin Holdings Co.,Ltd., through its subsidiaries, engages in the education business in
Japan.
IDP Education Limited engages in the placement of students into education institutions in
Australia, the United Kingdom, the United States, Canada, New Zealand, and Ireland.
International School Augsburg -ISA- gemeinnützige AG operates an international day
school with medium the language of instruction in English in Germany.
I-Scream Edu Co.,Ltd. provides digital education services in South Korea.
Johnan Academic Preparatory Institute, Inc. engages in the education business primarily
in Japan.
Kids Smile Holdings Inc. offers childcare and early childhood education services primarily
in Japan.
Kyoshin Co., Ltd., together with its subsidiaries, provides educational services in Japan and
internationally.
Laureate Education, Inc., together with its subsidiaries, offers higher education programs
and services to students through a network of universities and higher education institutions.
LITALICO Inc. operates school for learning and preschool in Japan.
Lumi Gruppen AS operates in the education market in Norway.
M2i Société anonyme provides professional training services in the fields of information
technology (IT), digital, and management.
Malvern International Plc provides educational services in the United Kingdom.
Meiko Network Japan Co., Ltd. provides education services in Japan.
MindChamps PreSchool Limited, together with its subsidiaries, owns and operates
preschools and enrichment centers in Singapore and Australia.
Nagase Brothers Inc. provides education services in Japan.
Nexted Group Limited provides educational services in Australia, Europe, and South
America.
88
Overseas Education Limited, an investment holding company, operates a foreign system
school in Singapore.
Pearson plc offers educational courseware, assessments, and services in the United
Kingdom, the United States, Canada, the Asia Pacific, other European countries, and
internationally.
Perdoceo Education Corporation provides postsecondary education through online,
campus-based, and blended learning programs in the United States.
Raffles Education Limited, an investment holding company, provides education and
related services in the regions of ASEAN, North Asia, South Asia, Australasia, and Europe.
Riso Kyoiku Co., Ltd. operates TOMAS private study Juku schools for elementary, middle,
and high school students in Japan.
Seigakusha Co.,Ltd. provides educational services in Japan.
Shingakukai Holdings Co.,Ltd. operates schools in Japan.
SHUEI YOBIKO Co., Ltd. provides various educational services in Japan.
SPRIX Inc., together with its subsidiaries, engages in the cram school and educational
businesses in Japan.
Step Co.,Ltd. operates cram schools in Japan.
Strategic Education, Inc., through its subsidiaries, provides education services through
campus-based and online post-secondary education, and programs to develop job-ready
skills.
Stride, Inc., a technology-based education service company, provides proprietary and third-
party online curriculum, software systems, and educational services to facilitate
individualized learning for students primarily in kindergarten through 12th grade (K-12) in the
United States and internationally.
Subaru Co., Ltd. provides learning and examination instruction services in Japan.
TAC Co.,Ltd. engages in personal education, corporate training, publishing, and manpower
businesses in Japan.
Tellusgruppen AB (publ), through its subsidiaries, operates in the education and childcare
sectors in Sweden.
Top Education Group Ltd, together with its subsidiaries, provides private higher education
services and English language courses in Australia.
Universal Technical Institute, Inc. provides transportation, skilled trades, and healthcare
education programs in the United States.
Visionary Education Technology Holdings Group Inc. provides private online and in
person educational programs and services to Canadian and international students that
reside in Canada and internationally.
Waseda Academy Co., Ltd. operates and manages tutoring schools for elementary, middle,
and high school students.
89
With us Corporation, together with its subsidiaries, operates as an education service
company in Japan.
Youji Corporation provides physical education services for children in Japan.
The following table provides details on some key financial metrics for these companies.
AGE Comparable Company Financial Information
LTM /
Current
(NZ$m)
Total
Revenue
EBITDA EBIT Net
(Cash) /
Debt
Market
Capital-
isation
Enter-
prise
Value
Invested
Capital
Minimum
9 (28) (53) (908) 6 (10) 4
25th
percentile
52 2 0 (6) (11) 35 55
Median
140 12 6 5 8 96 121
Average
796 109 79 110 160 1,045 972
75th
percentile
762 56 35 34 85 541 741
Maximum
8,010 1,137 960 2,750 2,955 13,845 11,447
Source: S&P Capital IQ (data as at 10 January 2024)
Key valuation multiple metrics for the sample are shown in the following table.
AGE Comparable Company Trading Multiples
TEV /
LTM
Revenue
TEV /
NTM
Revenue
TEV /
LTM
EBITDA
TEV /
LTM
EBIT
Price /
Book
Value
Price /
Invested
Capital
Minimum
0.1 x 0.3 x 1.8 x 2.5 x 0.1 x 0.1 x
25th percentile
0.4 x 0.6 x 4.8 x 7.5 x 0.8 x 0.5 x
Median
0.9 x 1.3 x 7.3 x 12.9 x 1.4 x 0.8 x
Average
1.5 x 1.5 x 12.6 x 22.7 x 2.1 x 1.3 x
75th percentile
1.9 x 2.1 x 12.2 x 26.6 x 2.1 x 1.6 x
Maximum
7.6 x 5.3 x 136.5 x 143.4 x 11.1 x 6.8 x
Source: S&P Capital IQ (data as at 10 January 2024)
---
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ZOOM SPECIAL MEETING
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will be held online via Zoom link commencing at 10:00 am on 28 March 2024. Shareholders can watch the proceedings
using the below access details.
Topic: ACE SM 2024. Date: 28 March 2024 Time: 10:00 am Auckland.
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hereby appointof
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Contact Name Contact Daytime Telephone Date
Ordinary Resolutions
Item 1
Acquisition of 100% of the shares on issue in Being Consultants Limited, AGE Limited and Send Global Limited (“Being
AI Group”) – Special Resolution – Listing Rules 4.14.1, 5.1.1 and 5.2.1, and Section 129 of the Companies Act 1993.
Item 2
Issue of 1,800,000,000 ordinary fully paid shares to the shareholders of the Being AI Group (“Consideration Shares”) –
Ordinary Resolution – Listing Rules 4.1.1 and 5.2.1, and Rule 7(d) of the Takeovers Code.
Item 3
Issue of up to 1,399,992,000 additional ordinary fully paid shares to the shareholders of Being Consultants Limited
(“Earn-In Shares”) – Ordinary Resolution – Listing Rule 4.1.1 and Rule 7(d) of the Takeovers Code.
Item 4
Issue of 120,000,000 new ordinary fully paid shares to wholesale investors (“Capital Raise Shares”) –
Ordinary Resolution – Listing Rule 4.1.1.
Item 5
Issue of 30,720,000 new ordinary fully paid shares to Excalibur Capital Partners Limited (“Excalibur Shares”) –
Ordinary Resolution – Listing Rules 4.1.1 and 5.2.1.
Item 6
Issue of 15,800,000 new ordinary fully paid shares to all existing ACE Directors and one former ACE Director
(“Directors’ Fee Shares”) in satisfaction of accrued Directors Fees – Ordinary Resolution – Listing Rules 4.2.1 and 5.2.1.
Item 7
Appointment of David McDonald as Director - Ordinary Resolution.
Item 8
Appointment of Katherine Allsopp-Smith as Director - Ordinary Resolution.
Item 9
Appointment of Joe Jensen as Director - Ordinary Resolution.
Item 10
Approval of Directors’ Fees - Ordinary Resolution.
Item 11
Issue of up to 132,000,000 Options to Employees, Contractors, and Non-executive Directors -
Ordinary Resolution – Listing Rule 4.2.1.
Item 12
Issue of up to 280,000,000 new ordinary fully paid shares to third parties (“Post Completion Shares”) –
Ordinary Resolution – Listing Rule 4.2.1.
Item 13
Revocation of existing constitution and adoption of a new constitution – Special Resolution.
Item 14
Appointment of William Buck as auditor and authorisation of the Board to fix auditor’s remuneration.
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---
Listing Profile
Reverse Listing of Being AI Group
Date — 11 March 2024
Prepared pursuant to Listing Rule 7.3.1(b)
LISTING PROFILE02
Key information
summary
In this section capitalised terms have the meaning set out
in the Glossary on page 70 of this document.
LISTING PROFILE03
What is this?
This document is a Listing Profile to support a Reverse Listing of the Being
AI Group. If the Reverse Listing completes, you will retain your Shares.
Shares give you an ownership stake in the Company which, on completion
of the Reverse Listing, will effectively become an ownership interest in the
Being AI Group.
You may receive a future return if the Company pays dividends or if your
Shares increase in value and you are able to sell them at a higher price
than you paid for them.
If the Company runs into financial difficulties and is wound up, as a
Shareholder you will be paid only after all creditors have been paid.
You may lose some or all of your investment.
Being AI is a diversified artificial intelligence services,
development and investment business that has recently been
launched. Being AI has agreed to acquire two mature businesses,
Send Global and AGE, which are both in industries that will
be significantly enhanced with the deployment of AI / EAT
(“exponentially accelerating technologies”). The other business assets
of Being AI, Being Consultants, Being Labs and Being Ventures,
are in start-up phase, and are therefore pre-revenue or in the early
stages of generating revenue.
About Being AI Group
LISTING PROFILE04
Further information
regarding the business activities
of the Being AI Group is available at
beingconsultants.ai
beingventures.ai
beinglabs.ai
sendglobal.com and
age.school.nz
Being Consultants:
an early-stage AI & EAT
consultancy business.
Being Ventures:
a recently established
initiative that will focus
on venture investment
and acting as a transform–
ation accelerator.
Being Labs:
a recently established
initiative that will serve as a
research and development
engine to advance AI and
collateral technologies.
Send Global’s expertise
focuses specifically on
physical distribution
solutions, domestically and
internationally, including
specialist file management
solutions. Send Global
provides these solutions
partly through its two wholly
owned subsidiaries,
Filecorp NZ Limited and
New Zealand Mail Limited.
AGE operates an innovative
school on the North Shore
of Auckland for children
from year 1 to 13 and has been
operating since 2018. AGE is
in the course of expanding its
online teaching platform and
is exploring the opportunities
provided through upcoming
reforms to the Education
Act 1989 as provided for in
the Coalition Agreement
between the National Party
and ACT New Zealand.
100% of the business operations
of Being AI, which comprise:
The business assets
being acquired
LISTING PROFILE05
How the Being AI Group
was valued
The Company negotiated the
purchase price for 100% of the
shares in the Being AI Group on
a commercial arms-length basis
with the Vendors.
Purchase of BCL: the initial purchase price for 100% of the shares
in BCL and its subsidiaries, Being Labs and Being Ventures, is $5 million
and may increase by up to a further $35 million in the future should
certain share price milestones for the Company’s share price be achieved
pursuant to an Earn-In Mechanism (refer to page 22 of the Listing Profile
for further details). The total $40 million purchase price for 100% of the
shares in BCL and its subsidiaries is based on the Board’s evaluation of
the expertise and personnel assembled by BCL, and BCL’s potential to
generate revenue and capital growth from developing its proprietary
technology and investing in technology-focused business opportunities.
If the Vendor of BCL, 2384, eventually receives the full purchase price
of $40 million, the value of your shares will have increased by at least
600% from the date of completion of the Reverse Listing Transaction.
There can be no assurance that the value of ACE shares will increase
by 600% or any other percentage amount. However, this purchase price
structure has been designed to seek to align the interests of 2384
with the interests of all other shareholders.
Purchase of SGL: the $25 million purchase price for 100% of the shares
in SGL is based on the Board’s evaluation of the historical revenues and
EBITDA produced by SGL, SGL’s potential to generate revenue in the
future, gross margins, brand strength and growth potential.
Purchase of AGE: the $15 million purchase price for 100% of the shares
in AGE is based on the Board’s evaluation of AGE’s current financial
performance, the cost to expand Physical School facilities to new sites,
AGE’s brand strength and AGE’s growth potential via expansion into
complementary educational verticals.
Refer to section 3 of this profile for further detail on the valuation
of the Being AI Group.
↙
↙
↙
LISTING PROFILE06
How you can get your money out
Key drivers of return
Shares are quoted on the NZX Main Board. This means you may be able to sell them on the NZX
Main Board if there are interested buyers. You may get less than you invested. The price will
depend on the demand for Shares.
The key drivers of return for the respective divisions within the
Being AI Group are as follows:
Being Consultants
The key drivers of return for Being Consultants are expected to be:
Securing New Business Contracts — expanding
the client base through strategic partnerships
and contracts for services, especially in sectors ripe
for AI transformation.
Enhancing Brand Awareness — strengthening market
presence through marketing initiatives, thought
leadership, and success stories to attract new clients.
Innovation in Service Offerings — continuously updating
and innovating consultancy services to stay ahead of
market trends and client demands.
Expanding into New Markets — geographical expansion
and exploring new industry verticals to diversify client
base and revenue streams.
Building and Retaining Talent — investing in skilled
AI professionals and maintaining a strong team
to deliver high-quality consultancy services.
i.
ii.
iii.
iv.
v.
LISTING PROFILE07
Being Labs
The key drivers of return for Being Labs are expected to be:
Identifying New Technologies, Products, and Services
— continuously researching to identify emerging trends
and opportunities in AI technology.
Effective Implementation of Development Strategies
— planning and executing R&D projects to develop
innovative AI solutions.
Collaboration and Partnerships — establishing
partnerships with academia, industry, and research
institutions for collaborative development and funding.
Intellectual Property and Commercialisation — focusing
on patenting innovations and commercialising developed
technologies to generate revenue.
Talent Acquisition and Retention — attracting and
retaining top-tier researchers and developers to foster a
culture of innovation and excellence.
i.
ii.
iii.
iv.
Being Ventures
The key drivers of return for Being Ventures are expected to be:
Identifying Investment Opportunities — diligently
scouting for promising startups in AI, Web3, and
Advanced Technology sectors.
Successful Funding and Closing of Investments —
efficiently managing the investment process, from due
diligence to deal closure.
Post-Investment Management — actively engaging with
portfolio companies to provide strategic and operational
support for growth and scaling.
Diversification of Investment Portfolio— investing in a
range of startups across different stages and sectors to
mitigate risks and maximize returns.
Exit Strategies — planning and executing successful
exit strategies, such as IPOs or acquisitions, to realise
investment gains.
i.
ii.
iii.
iv.
v.
v.
LISTING PROFILE08
Send Global
AGE
The key drivers of return for Send Global are:
The key drivers of return for AGE School are:
Continuing to focus on SGL’s traditional business model.
Expansion of the Physical School into new property
locations. There is strong demand for the senior years
that AGE cannot satisfy due to limited space at its
current location.
Expanding SGL’s freight and logistics footprint by
offering solutions that use smart technology, smart
applications and AI.
Expansion of AGE’s VR academy to deliver more
online education.
Education related Acquisitions that will benefit
from Virtual Reality and AI Technologies.
Exploring opportunities provided by the upcoming
intended reforms to the Education Act 1989, including
the new partnership schools model, which may provide
choices for a large number of students who previously
could not afford non-state funded education.
i.
i.
ii.
ii.
iii.
iii.
LISTING PROFILE09
Key risks affecting
this investment
Investments in shares are risky. You should consider all of the information in this Profile,
and previously disclosed information about the Reverse Listing and the Being AI Group, when
deciding if the degree of uncertainty about the Company’s future performance and returns
is suitable for you. The price of Shares should reflect the potential returns and the particular
risks of Shares.
This summary does not cover all of the risks which might affect the Being AI Group, and
by extension an investment in Shares. You should read section 6 (Risks to the Being AI Group’s
business and plans) and other references in this Profile to risk factors (for example, risks arising
for investors from the nature of the product), and the strategies the Company has to mitigate
those risks where practicable.
The Vendors consider the most significant risk factors that could affect the Being AI Group,
and by extension the value of the Shares are:
Dependence on key personnel
— applicable to all of Being Consultants Limited, Send Global Limitedand AGE Limited.
Failure to effectively manage growth opportunities
— applicable to all business divisions within the Being AI Group.
Significant competition in relevant sectors
— applicable primarily to Send Global Limited
Unsuccessful entry into new geographical markets and verticals
— applicable primarily to Send Global Limited and Being Consultants Limited.
Reliance on securing significant contracts
— applicable primarily to Being Consultants Limited.
Failure to raise sufficient capital to implement business strategies
— applicable to all business divisions within the Being AI Group
Significant legal and regulatory changes
— applicable to Being Consultants Limited and AGE Limited.
•
•
•
•
•
•
•
The financial position and performance of the Being AI Group are
essential to an assessment of this investment. You should also read
section 5 of this Profile (Financial information).
Where you can find the Being AI Group’s
financial information
LISTING PROFILE10
Background
LISTING PROFILE11
If the Reverse Listing completes,
the Company will be renamed
Being AI Limited, and its NZX
ticker code will be changed
to BAI.
This Profile should be read
together with the information
contained in the accompanying
Notice of Meeting.
Ascension Capital Limited (Company or ACE) is listed on the
NZX Main Board.
On 11 December 2023, the Company announced to NZX
that it had reached a conditional agreement to acquire 100%
of the shares on issue in Being Consultants Limited (BCL),
Send Global Limited (SGL) and AGE Limited (AGE) (together
referred to as Being AI Group) via a proposed ‘reverse listing’
(Reverse Listing).
Introduction
The Being AI Group will comprise
a diversified AI ecosystem encompassing
in-house AI innovation, providing AI advice,
education and support services, and investment
in AI startups and heritage industries that will
be impacted by the deployment of AI.
SGL and AGE are the first acquisitions in
two heritage industries that will be impacted
by deployment of AI—being logistics
and education.
LISTING PROFILE12
Overview
In a ‘reverse listing’, a listed company (in this case, the Company) acquires a private company, or
companies (in this case, BCL, SGL and AGE, and by extension the Being AI Group), and pays for
the acquisition by issuing shares in itself to the vendors of the private companies. The effect is
that the private companies become subsidiaries of the listed company and the vendors of the
private companies become shareholders of the listed company.
If the Reverse Listing completes:
The existing shareholders of
Being AI Group (Vendors) will be
issued 1,800,000,000 fully paid
ordinary shares in the Company
(Consideration Shares) at an issue
price of $0.025 per share as
consideration for the purchase
of all of the shares in BCL, AGE
and SGL, including all wholly
owned subsidiaries (the Being AI
Group). The initial valuation for
the Being AI Group is therefore
$45 million as at completion of
the Reverse Listing. Of the initial
$45 million valuation, $5 million
is for all of the shares in BCL, $15
million is for all of the shares in
AGE and $25 million is for all of
the shares in SGL.
Subject to the future attainment
of certain share price milestones
for the ACE shares, pursuant
to an “earn-in” mechanism, the
consideration payable to certain
Vendors will be increased by up to
a further $35 million, which would
be satisfied by the issue of up to a
further maximum 1,399,992,000
additional shares in ACE at an
issue price of not less than $0.025
(Earn-in Shares).
2013 (FMCA)) identified by the
Company at an issue price of not
less than $0.025 per share to
raise additional new capital post
completion of the Reverse Listing.
Due to the regulatory framework
associated with reverse listing
transactions, ACE is restricted
from raising new capital via an
offer to all existing shareholders
of ACE, or other members of the
public, in conjunction with the
completion of the Reverse Listing.
before 29 June 2024 (being 3
months after the schedule time for
completion of the reverse takeover
transaction).
Following completion of the
Reverse Listing, the Company may
issue up to a further 120,000,000
new fully paid ordinary shares in
the Company (Capital Raise Shares)
to certain wholesale investors
(as that term is defined in the
Financial Markets Conduct Act
$768,000 of the existing
indebtedness of the Company to
Excalibur Capital Partners Limited
(Excalibur) shall be capitalised
by issuing 30,720,000 fully paid
ordinary shares in the Company to
Excalibur (Excalibur Shares) at an
issue price of $0.025 per share.
$395,000 of accrued and unpaid
directors’ fees will be capitalised
into 15,800,000 fully paid ordinary
shares in the Company (Directors’
Fee Shares) at an issue price of
$0.025 per share. The balance
of any indebtedness of the
Company to Excalibur and others
will be paid shortly after the
completion of the Reverse Listing.
↙
↙
↙
↙
↙
LISTING PROFILE13
The issue price of not less than $0.025 for each of the share parcels comprising the Restructure is
based on the last price that shares in the Company were issued for and, as above, is representative
of the Company’s value as a “listed shell”. Refer to section 10 of the Independent Adviser’s Report
and Appraisal Report commissioned by ACE from Armillary Limited for further information relating to
the valuation of the share price.
The Restructure values the Being AI Group at $45 million as at completion of the Reverse Listing
and up to a total of $80 million if all of the Earn-In Shares are issued as a result of certain share
milestones for ACE being achieved following completion of the Reverse Listing.
The combined shareholding of each of the Vendors will be approximately 97.20% of the shares
on issue in the Company immediately after completion of the Reverse Listing, assuming that the
Consideration Shares, the Excalibur Shares and the Directors’ Fee Shares are issued in full, but
that no Capital Raise Shares are issued. Furthermore, theThe combined shareholding of each of
the Vendors will be approximately 98.40% the shares on issue in the Company if the Earn-In Shares
are issued.
Furthermore, in the 12-month period immediately following completion of the Reverse Listing, it is
proposed that up to a maximum of 132,000,000 new options to acquire up to 132,000,000 shares
in the Company may be issued to non-executive directors, senior executives, and current and future
employees of the Being AI Group. Refer to section 3 of this Profile for further information relating
to these options.
LISTING PROFILE14
Index
Key information summary
Background10
2
15
17
52
55
63
70
72
76
79
Letter from the Chairman
of Ascension Capital Limited
Key features of the Shares
Financial information
Risk to the Being AI Group’s business & plans
Ta x
Where you can find more information
Contact information
Glossary of Terms
The Being AI Group and what it does
LISTING PROFILE15
The Board of Ascension Capital Limited is seeking to progress the
implementation of a significant operational and capital restructure, as announced
to the market on 11 December 2023 subject to shareholder approval (Restructure).
In the view of the ACE Board, the AI sector is dynamic, fast-growing and
innovative, and represents a fantastic investment opportunity for the Company.
The Being AI Group, through its various entities, will operate a diversified
AI services, development and investment business, together with two mature
investee business enterprises.
The two intended investee portfolio companies within the Being AI Group are
participants in the logistics and education sectors respectively, are well established
and provide scope for accelerated performance and expansion through the
deployment of new AI technology solutions, and from the application
of traditional business development initiatives.
Being AI Group will be led by a team of passionate and experienced
executives committed to the growth and success of the businesses within the
Being AI Group.
The Restructure values the Being AI Group at $45 million as at completion of
the Reverse Listing and up to a total of $80 million if all of the Earn-In Shares are
issued as a result of certain share milestones for ACE being achieved following
completion of the Reverse Listing (refer to section 3 for further detail relating to
the share price milestones associated with the Earn-In Shares).
The issue price of $0.025 per share values the Company as a "listed shell" at
circa $1,700,000, including all of the Company’s anticipated indebtedness at
the completion of the transaction. In the Board's opinion, this represents a fair
valuation of the Company.
Letter from the Chairman of Ascension Capital Limited
Dear Ascension Capital shareholders,
LISTING PROFILE16
Having regard to the business opportunity afforded to the Company by
the acquisition of the Being AI Group, the sector in which the Being AI Group
operates, the historical financial performance of SGL and AGE, and the growth
prospects for each of BCL, Being Labs and Being Ventures, the Board considers
that the acquisition of the Being AI Group represents a high growth proposition
for the Company and its shareholders.
The Board asks that all shareholders read this Profile together with the
Independent Advisor’s Report and Appraisal Report and the Notice of Meeting
that accompany this Profile.
We encourage shareholders to approve all of the resolutions at the
Annual Meeting.
Yours sincerely,
Keith Jackson
Chair
Ascension Capital Limited
Board recommendation
LISTING PROFILE17
The Being AI Group
and what it does
LISTING PROFILE18
Overview of the Being AI Group
Being Consultants Limited,
and its two wholly owned
subsidiaries, Being Ventures
Limited & Being Labs Limited.
Send Global Limited,
and its two wholly owned
subsidiaries, FileCorp
New Zealand Limited and
New Zealand Mail Limited; and
AGE Limited;
all of which are New Zealand
incorporated companies.
The Being AI Group is will comprise:
The following diagrams show the structure and ownership of the Company
and of the Being AI Group—both before and after completion ofthe Reverse Listing.
2384 LP
2061 LPTE TURANGA UKAIPO
BEING CONSULTANTS LIMITED
BEING LABS LIMITED
NEW ZEALAND MAIL LIMITED
AGE LIMITED
BEING VENTURES LIMITED
FILECORP NEW ZEALAND LIMITED
SEND GLOBAL LIMITED
Current
Being AI Group
Structure
LISTING PROFILE19
Current
ACE Company
Structure
After Reverse Listing & Placement
ACE SHAREHOLDERS
BEING AI GROUP SHAREHOLDERS,
EXCALIBUR CAPITAL PARTNERS LIMITED,
AND BEING AI LIMITED DIRECTORS
E XISTING
ACE SHAREHOLDERS
ASCENSION CAPITAL LIMITED
AGE LIMITED
NZX TICKER CODE
ACE
NZX TICKER CODEBAI
BEING AI LIMITED
99%
100%
100%
100%
1%
BEING CONSULTANTS LIMITED
BEING L ABS
LIMITED
BEING VENTURES
LIMITED
NEW ZEALAND
MAIL LIMITED
FILECORP NEW ZEALAND
LIMITED
SEND GLOBAL LIMITED
LISTING PROFILE20
Nature of Being AI Group’s
operations & activities
The Being AI Group, through its various entities, will operate a diversified
AI services, development and investment business, together with two
mature investee business enterprises, Send Global and AGE.
The principal business operations of Being AI will comprise:
The business assets being acquired
Being ConsultantsBeing VenturesBeing Labs
Send GlobalAGE
Being Consultants is an
early-stage AI & EAT
consultancy business.
Being Ventures is a recently
established initiative that will
focus on venture investment
and transformation of traditional
companies through the
implementation of cutting edge
EAT capabilities.
Being Labs is a recently
established initiative that will
serve as the research and
development engine to advance AI
and collateral technologies.
Send Global is an expert in
physical distribution, both
domestic and international,
including specialist file
management solutions.
Send Global has two wholly
owned subsidiary companies —
FileCorp New Zealand Limited
and New Zealand Mail Limited.
Send Global has been operating
(directly, or through its subsidiary
companies) since 2004.
AGE operates an innovative school
on the North Shore of Auckland
for children from years 1 to 13 and
has been operating since 2018.
LISTING PROFILE21
Being AI is fully committed to preserving Environmental, Social and
Human Capital.
With this in mind, it will investigate becoming a B Corp company,
and is in the process of obtaining WELL Certification for its Investee
company AGE School.
LISTING PROFILE22
The mandate
for
The value proposition for
Being AI is that it will become an
investment ecosystem that thrives
on the interconnectivity of
innovation, transformation,
and strategic investment.
A summary by David McDonald,
Co-founder of Being AI
LISTING PROFILE23
Being Consultants Limited is
expected to be a cornerstone of
our operations, equipped with
a world-class AI team from our
partnership with Futureverse,
and is ready to help businesses
step confidently into a digital-first
future. We’re not just consultants;
we’re partners in transformation.
Our team understands the
challenges and opportunities that
come with integrating AI into
business operations.
We will work closely with our
clients to provide tailored, practical
AI solutions that propel them
ahead of the curve, ensuring
they're not only participants in
the digital revolution but also
leaders defining it.
Being Ventures Limited will act
as our investment arm, mirroring
an investment bank's strategic
financial investments but with
a keener eye on companies ripe
for AI integration and digital
transformation. Like a careful
gardener selecting the right plants
for the garden, we will select
companies that, with the right
technological enhancements,
can grow to their full potential.
Being Labs Limited will be our
innovation hub, where cutting-
edge AI solutions are born. We
intent on fostering an environment
where ideas can grow into
technologies that will define the
future of business operations.
The technology we develop at
Being Labs wont be locked away
for internal use only; it will give our
clients a competitive edge.
We’re in the business of making
breakthroughs and turning them
that drive business forward.
into real-world applications
taking the latest
advanced AI technology work for everyone—
LISTING PROFILE24
In partnering with us, companies
get more than just consulting—
they get a pathway to transform
and thrive in an increasingly
connected and digital world.
Send Global and AGE will
serve as proof of concept.
They will be living, breathing
examples of our ecosystem's
effectiveness—businesses that
have been transformed,
optimised, and stand as
testaments to the power of AI
and digital acceleration.
We will offer external businesses
the chance to leverage this
expertise and technology. It’s
about making the leap into a
future where AI is not a buzzword,
but a practical tool for efficiency
and growth.
With us, clients don't just get a
service; they get a partner who’s
invested in bringing them to the
forefront of the digital age.
cultivates growth at every stage:
from seed to scale.
We are a holistic ecosystem that
LISTING PROFILE25
Description of
business activities
by division
Being Consultants is an early-stage AI/EAT consultancy business.
Being Consultants partners with enterprises to strategically implement
AI solutions that digitally transform business operations focused on
increased automation, improved decision making, enhanced customer
experiences and create new intelligent products – ultimately driving
higher revenue growth and higher margins through optimised workflows
across the organisation.
Being Consultants operates on a consultancy and service delivery
model. Their revenue will be generated primarily through consultancy
fees charged to client enterprises for implementing AI solutions. The
model is structured around project-based engagements where Being
Consultants offers expertise in AI and EAT to enhance clients' business
processes. This includes conducting assessments, developing strategies,
and implementing AI-driven solutions. The business model is scalable and
adaptable, catering to a range of industries and focusing on long-term
partnerships that evolve with clients' growing AI needs. The consultancy
also aims to develop proprietary AI tools and methodologies that can be
licensed to clients, providing an additional revenue stream.
Being Consultants is in the early stages of establishing the services
noted above with the use of loans from key stakeholders. In particular, on
28 November 2023, Wilshire Treasury Limited, an affiliate of 2061, agreed
to provide short term advances to Being Consultants of up to $200,000
at an interest rate of the ANZ 90-day bank bill rate plus 2.75% per annum.
It is intended that short-term advances provided by Wilshire Treasury
Limited will be refinanced following completion of the Reverse Listing.
Being Consultants
Being Labs is recently established and will operate as the research and
development engine within the Being AI framework. Being Labs' will
generate revenue by developing and licensing proprietary AI technologies
and solutions. This includes creating AI prototypes and products, which
are either commercialised into client offerings or developed into new
ventures. Being Labs has no borrowings and has not commenced trading,
meaning it is pre-revenue.
Being Labs
LISTING PROFILE26
Being Ventures is recently established and will follow a venture capital
investment model, sourcing and taking equity stakes in early-stage
startups specializing in AI, Web3, and Advanced Technologies.
Being Ventures has no borrowings and has not commenced trading,
meaning it is pre-revenue.
Being Ventures will also acquire traditional companies and enhances
their value through the integration of EAT capabilities. Revenue is
generated through the increased profitability and eventual sale or public
listing of these transformed entities.
Being Ventures
The model will rely on continuous innovation and collaboration with
external partners, such as academic institutions, for research and
development funding. Being Labs may also receive grants or participate
in joint ventures for specific research projects. Another potential revenue
stream is through patents and intellectual property rights associated with
the AI technologies developed by the lab.
LISTING PROFILE27
Send Global holds an established market position as a quality
manufacturer of filing products for the domestic and international
markets, and as an experienced aggregator of services in the physical
distribution market in New Zealand.
Send Global’s filing business originated some 45 years ago in private
ownership before being purchased by the Group in September 2014.
New Zealand Mail entered the deregulated Business Mail market in 2004
and has evolved to meet the ever-changing marketplace within which it
operates.
Send Global ’s business units including business mail distribution, data
and mail preparation services (both physical and digital), fulfilment, courier
and logistics, offsite facilities management and unique and bespoke
filing solutions – provide specific industry expertise across the spectrum
from large corporates to government agencies and SMEs. An important
element of its success is continuity, with many of its senior team having
20+ years in the industry.
Send Global was previously listed on the NXT Market under the name G3
Group Limited, however Send Global and 2061 LP between them acquired
all shares held by minority shareholders and delisted from the NXT Market
in October 2017. This decision was made by the directors of the company
at the time on the basis that the NXT Market had not achieved critical
mass since establishment, the company’s shares were only occasionally
traded, and the ongoing cost of maintaining a listing on the NXT Market
were unjustified. Not long after the delisting of Send Global from the NXT
Market, NZX made a commercial decision to disestablish the NXT Market.
Send Global’s growth path is focused on expanding its footprint in digital
cloud-based filing solutions, courier, freight, logistics (3PL) and transport
sectors both domestically and in Australia.
The audited results of Send Global for the financial year ended 31 March
2023 comprise revenues of $41.8 million, and normalised EBITDA of $2.8
million.1 For the 6-month period ended 30 September 2023, unaudited
normalised EBITDA was $1.5 million.
Send Global
1
The $2.8 million normalised EBITDA for the year ended 31 March 2023 excludes exceptional items (G3 Medical close down costs
($243,000), prior year costs expensed in the 2023 financial year ($154,000), subvention payments to associated entities that are not part
of Being AI Limited ($2.1 million), and a capital gain on the sale of Send Global’s property in Avondale, Auckland ($1.1 million).
LISTING PROFILE28
AGE operates an innovative school on a property owned by the
Vendor, 2061, on the North Shore of Auckland for children from years 1
to 13 and has been operating since 2018. The school currently has 17 staff
(11 full-time and 6 part-time) and has a school roll of approximately 100
students, which is considered potentially sub-scale. AGE School provides
a revolutionary approach to education — a place where care for each
other and the environment goes hand-in-hand with learning that extends
well beyond the national curriculum. AGE celebrates the individual in
every student. AGE School’s small size and teacher to pupil ratio means
they can offer what other schools cannot — personalised learning
based on each child’s interests and a high level of support to help them
excel and thrive.
AGE School’s learning coaches (teachers) team up with worldwide
innovators and inspirational businesspeople to mentor students on
projects that stretch them well beyond the four walls of a classroom.
This helps students understand how important technology,
entrepreneurial thinking, and creativity are in the world they’re growing up
in and gives their learning that much more meaning.
The audited results of AGE for the financial year ended 31 December 2022
comprise revenues of $3.7 million, and normalised EBITDA of
$0.53 million. For the 6-month period ended 30 September 2023,
unaudited normalised EBITDA was $0.19 million.
AGE is in the course of expanding its online teaching platform and is
exploring the opportunities provided through upcoming reforms to the
Education Act 1989 as provided for in the Coalition Agreement between
the National Party and ACT New Zealand.
AGE
LISTING PROFILE29
Sector overview
Being Consultants operates primarily in the
technology consulting sector, catering to entities
seeking digital transformation through AI and
EAT. It will engage in a broad range of industries
including finance, healthcare, retail, and more.
Being Consultants provides AI-driven solutions
for automation, decision-making and customer
experience enhancement. There is growing demand
for AI integration in business operations to improve
efficiency and competitiveness.
Being Ventures will operate within the venture capital
and startup ecosystem — identifying, investing in,
and nurturing early-stage startups in AI, Web3, and
Advanced Technologies. Being Ventures’ role will
extend beyond financing to include strategic support
and operational guidance.
Send Global operates across all sectors and
industries in New Zealand. Its customers include large
corporates, Government Departments and small and
medium sized enterprises.
Send Global operates various channel-to-market
options in New Zealand, via direct sales and online
presence and via third party reseller agreements.
Overseas markets are currently serviced via
direct sales only.
AGE School was founded as the Academy for
Gifted Education in 2017 but demand from the
wider community for an innovative strength-based
education model required that AGE expand its
student intake.
The “AGE Way” is based on Maslow’s Hierarchy of
Needs which states that the lower physiological needs
of safety, love and belonging must be met before the
higher needs of Intellect, Creativity and Emotion can
be developed.
Being Labs intends to involved in the research
and development sector of AI technology, including
experimental applications in machine learning,
neural networks, and advanced technologies.
Being Labs will focus on creating new AI
prototypes and products that have potential for
commercialisation. The sector is characterised by
continuous innovation, significant investment in
research and development, and collaborations with
academic and research institutions. The primary
aim is to pioneer ground-breaking AI technologies
and solutions that can be applied across various
industries to drive operational efficiencies and create
new market opportunities.
Being Consultants
Being Ventures
Send Global
AGE
Being Labs
This sector is marked by innovation and a
willingness to take on significant risk with the aim
of achieving high returns on investment through
successful scaling.
LISTING PROFILE30
The AGE Way has little real competition in the
New Zealand marketplace. The great majority
of schools (both private and public) still adhere
to the traditional industrial model of education
and diversity is a struggle for three teachers in a
classroom of 90 children in the open plan modern
learning environment.
LISTING PROFILE31
Current & future key aspects
of the Being AI Group’s business
Being Consultants
The current and future aspects of the Being AI Group’s business that will have the most impact
on the financial performance of the Being AI Group are noted below. Please note that all future
aspects noted below are provided on the assumption the Being AI Group does not encounter
any material issues and is able to successfully raise sufficient capital to implement business
strategies over time. Any capital raised in association with the issue of the Capital Raise Shares
(if any) would provide insufficient capital to fully implement all business strategies. Furthermore,
Being Consultants, Being Ventures and Being Labs present a venture capital type risk profile
which enhances the risk of encountering material issues, particularly in raising sufficient capital.
Accordingly, the Being AI Group would need to successfully undertake capital raising in the future
to fully realise its plans.
Securing New Business Contracts —
expanding the client base through strategic
partnerships and contracts, especially in
sectors ripe for AI transformation.
Enhancing Brand Awareness —
strengthening market presence through
marketing initiatives, thought leadership, and
success stories to attract new clients.
Innovation in Service Offerings —
continuously updating and innovating
consultancy services to stay ahead of
market trends and client demands.
Expanding into New Markets —
geographical expansion and exploring new
industry verticals to diversify client base
and revenue streams.
Building and Retaining Talent — investing
in skilled AI professionals and maintaining
a strong team to deliver high-quality
consultancy services.
i.
ii.
iii.
iv.
v.
Being Labs
Identifying New Technologies, Products,
and Services — continuously researching to
identify emerging trends and opportunities in
AI technology.
Effective Implementation of Development
Strategies — strategically planning
and executing R&D projects to develop
innovative AI solutions.
Collaboration and Partnerships —
establishing partnerships with academia,
industry, and research institutions for
collaborative development and funding.
Intellectual Property and Commercialisation
— focusing on patenting innovations and
commercialising developed technologies to
generate revenue.
Talent Acquisition and Retention —
attracting and retaining top-tier researchers
and developers to foster a culture of
innovation and excellence
i.
ii.
iii.
iv.
v.
LISTING PROFILE32
Send Global
AGE
Continuing to focus on its traditional
business model and carefully managing
demand changes to provide new and exciting
offerings to the market.
Expansion of the Physical School into new
property locations.
Expanding SGL’s freight and logistics
footprint by offering solutions that use smart
technology, smart applications and AI.
Expansion of AGE’s VR academy to deliver
more online education.
Education related Acquisitions that will
benefit from VR and AI Technologies.
Exploring opportunities provided by
the intended upcoming reforms to the
Education Act 1989, including the new
partnership schools model, which may
provide choices for a large number
of students who previously could not
afford non-state funded education.
i.
i.
ii.
ii.
iii.
iv.
Being Ventures
Identifying Investment Opportunities —
diligently scouting for promising startups
in AI, Web3, and Advanced Technology
sectors.
Successful Funding and Closing of
Investments — efficiently managing the
investment process, from due diligence to
deal closure.
Post-Investment Management — actively
engaging with portfolio companies to
provide strategic and operational support for
growth and scaling.
Diversification of Investment Portfolio —
investing in a range of startups across
different stages and sectors to mitigate risks
and maximize returns.
Exit Strategies — planning and executing
successful exit strategies, such as IPOs
or acquisitions, to realise investment gains.
i.
ii.
iii.
iv.
v.
LISTING PROFILE33
Key strategies & plans
for key aspects of the business
Service Innovation — regularly
update service offerings to
include the latest AI advances
and methodologies. Invest in R&D
to develop proprietary tools.
Client Acquisition Strategy —
implement targeted marketing
campaigns and networking
initiatives to secure new business
contracts. Utilise case studies
and success stories to
showcase expertise.
Brand Development — enhance
brand visibility through digital
marketing, participation in industry
events, and thought leadership in
AI consulting.
Market Expansion — conduct
market research to identify new
regions and sectors for expansion
and establish local partnerships
for market entry.
Talent Management — foster a
culture of continuous learning and
development to attract and retain
top AI talent. Implement incentive
programs to maintain a highly
skilled workforce.
↙↙↙
↙↙Being
Consultants
Commercialisation & IP Strategy
— develop a clear pathway
for the commercialisation of
technologies. Protect innovations
through patents and intellectual
property rights.
Research and Development
Focus — prioritise research in
cutting-edge AI domains. Allocate
resources for experimental
projects with high potential.
Collaboration and Networking
— establish strong ties
with academic institutions,
industry leaders, and research
organisations for joint
development projects and
knowledge exchange.
Strategic Partnerships for Funding
— seek out funding opportunities
through grants, partnerships,
and joint ventures to support
ambitious R&D projects.
Building a Talented R&D Team
— create an attractive work
environment for top researchers
and developers. Offer competitive
benefits, professional growth
opportunities, and a collaborative
culture.
↙↙↙
↙↙Being Labs
LISTING PROFILE34
Expansion of the Physical School
into new property locations.
There is strong demand for the
senior years that AGE cannot
satisfy due to limited space at our
current location.
Maximise yield from the existing
mature businesses.
Education related Acquisitions
that will benefit from VR and
AI Technologies.
Expand freight and logistics
footprint, by offering solutions
that use smart technology, smart
applications, and AI.
Expansion of AGE’s VR academy to
deliver more online education.
Exploring opportunities
provided by the intended
upcoming reforms to the
Education Act 1989, including the
new partnership schools model,
which may provide choices for
a large number of students who
previously could not afford non-
state funded education.
↙
↙
↙
↙
↙
↙
AGE
Send Global
Active Portfolio Management
— offer strategic guidance,
operational support, and
mentorship to portfolio
companies. Regularly review
and assess the performance
of investments.
Investment Scouting — develop
a robust pipeline for identifying
potential investment opportunities
through industry networking,
startup events, and collaborations
with incubators.
Efficient Investment Process —
streamline the due diligence and
investment process to enable
quick and effective deal closures.
Leverage technology and expert
advisors for thorough evaluation.
Portfolio Diversification —
strategically diversify investments
across various stages and sectors
to balance risk and potential
returns. Remain adaptable to
market trends.
Exit Planning — continuously
evaluate the market for potential
exit opportunities. Prepare
portfolio companies for successful
exits through strategic scaling
and positioning.
↙↙↙
↙↙Being
Ventures
LISTING PROFILE35
Post Completion Board of Directors
David McDonald
If the Reverse Listing completes:
David McDonald and Katherine Allsopp-Smith, who are each associated with the Vendors,
will be appointed directors of the Company. They will not be “independent directors”
(as that term is defined in the Listing Rules).
Existing director Sean Joyce will remain a director of the Company.
He will not be an independent director.
Existing director Roger Gower will remain an independent director of the Company.
Joe Jensen will be appointed as a director of the Company. He will be an independent director
for the purposes of the NZX Listing Rules.
From the time of completion of the Reverse Listing, Sean Joyce will be appointed as
Chair of the Company.
•
•
•
•
•
David is a well-regarded participant in the AI, Web3, and digital
transformation sectors, with over two decades of pioneering the tech
landscape. He founded Altered State Machine (ASM), which achieved
New Zealand's largest seed funding round, and comprised the largest
piece in the formation of Futureverse, a $1 billion NZD ‘Kiwi
unicorn.’ His patented AI technology is a core component of the
Futureverse's platform.
Under David's leadership, the industry leading R&D department created
ground-breaking projects like Jen ai, an AI music composer. David's vision
extends to fostering global partnerships and collaborations, with ASM and
Futureverse engaging with global brands such as Warner Bros Discovery,
Authentic Brands Group, Muhammad Ali Enterprises, FIFA, Snoop Dogg,
and Warner Music. David’s forward-thinking approach in transforming
complex concepts into practical solutions positions him as a dynamic force
in the tech industry, continually shaping the future of technology with
innovative solutions.
David enjoys restoring and collecting cars, with a particular love for JDM
classics, doing wood and metal work and creating video games. Through
Futureverse, David was able to donate over $1 million to the Auckland City
Mission last year and continue to support that cause. David belongs to
Ngāi Tahu iwi.
As David’s investment vehicle,
2384, will hold a significant
number of ACE shares post
completion of the Restructure,
David will not be an “independent
director” of the Company (as that
term is defined in the Listing
Ru le s).
Executive Director
LISTING PROFILE36
Katherine
Allsopp-Smith
Katherine is a graduate of
Auckland University of
Technology and is actively
involved in the family businesses,
including 2061.ai, Te Turanga
Ukaipo Charitable Trust
(previously AGE Foundation
Charitable Trust), AGE School,
Send Global, Wilshire Group and
Aspen Colorado based Property
business CM LLC.
Katherine’s passions lie at
the intersection of business,
environmental sustainability
and emotional wellbeing.
Katherine’s descent is from
the Ukaipo of the Pacific.
As Katherine’s investment
vehicle 2061, which is co-owned
by Evan Christian, will hold a
significant number of ACE shares
post completion of the Reverse
Listing, Katherine will not be an
“independent director” of the
Company (as that term is defined
in the Listing Rules).
Executive director
Sean Joyce
Sean Joyce has been a director
of the Company since
2020 and has been instrumental
in restructuring it and in
identifying and structuring the
proposed reverse takeover with
Being AI Group.
Sean has over 30 years’ experience
in the corporate sector as a
corporate lawyer and a market
participant. Sean started his
legal career at Phillips Fox (now
DLA Piper) in 1993. He was then
a founding member of boutique
corporate law firm, Jones Young,
and was partner in that firm for
over 10 years. In 2010, Sean set
up his own corporate law practice
Sean Joyce – Corporate Counsel.
Sean is a principal of Auckland
based capital markets advisory
firm, CM Partners Limited,
which has been involved in a
significant number of capital
markets transactions since its
formation in 2014.
Sean has a particular focus on the
capital markets and securities laws
in New Zealand and Australia.
This includes regulatory
compliance, initial public
offerings, compliance listings,
reverse listings, fundraising
and offerings of various types of
securities in New Zealand.
Sean is a Chartered Member
of the Institute of Directors
(CMinstD) and holds a Bachelor
of Arts and a Bachelor of Laws
(Hons) from Auckland University.
Sean is a director of New
Zealand’s largest early childhood
education company, Best Start
Educare Limited, which has a
roll of approximately 15,000+
children. Sean is also a director
of Auckland based technology
company, Mega Limited, and
is a director of several other
Executive chair
LISTING PROFILE37
As Sean’s investment vehicle Excalibur Capital
Partners Limited holds a significant number of ACE
shares, Sean is not an “independent director” of the
Company (as that term is defined in the Listing Rules).
Joe Jensen
Joe resides in the State of Arizona in the United States of America and has
completed an MBA from W.P. Carey School of Business, Arizona State
University. He also holds a Bachelor of Electrical Engineering degree from
South Dakota State University.
Joe has a storied career in the technology sector in North America and
has held various senior executive roles during his 28-year tenure at Intel
Corporation. His last role, held until his retirement from Intel in 2022, was
as Vice President, Internet of Things Group — General Manager, Retail,
Banking, Hospitality & Education. Previous roles at Intel included General
Manager of the Low Power Embedded Products Division, and General
Manager of the Embedded Computing Division at Intel Corporation.
Joe brings with him a vast amount of industry and technical experience
The Board consider that Joe will be an independent director as that term
is defined in the Listing Rules and is very pleased to have secured an
independent director of Joe’s calibre.
Independent Director
private companies. Sean brings a broad range of skills
to the Board, including his extensive legal expertise,
experience in the capital markets, and his operational
and leadership skill sets garnered through his time in
executive, advisory and board roles undertaken within
a wide range of corporate entities.
LISTING PROFILE38
Roger Gower
Roger is an experienced executive,
director and chair of public and
private companies. Roger had a
corporate career in logistics and
transportation, which included
being a key executive in listing a
New Zealand transport company
on the NASDAQ and completing
significant offshore financing of
transport assets.
Following his executive career, he
completed a Master of Philosophy
at Cambridge University, with
his research focusing on the use
of economic tools to improve
environmental outcomes and
the key attributes of successful
spinouts. Roger also holds a
Bachelor of Commerce from the
University of Auckland and an
MBA from Massey University.
He is currently Chairman of
PrimePort Timaru and New
Zealand Food Innovation
Auckland (otherwise known
as The FoodBowl). Roger is
an independent director of a
number of private and NZX-listed
companies and is an chaired the
audit and risk committees for a
number of these companies.
Roger will chair the Audit and
Risk Committee of the Company,
and will continue to be an
independent directors of the
C omp a ny.
The Board of the Company
consider that Roger will be an
“independent director” of the
Company (as that term is defined
in the Listing Rules).
Independent Director
Corporate governance
On completion of the Reverse Listing, the Company will continue
with the corporate governance policies available to view at
ascensioncapital.co.nz/corporate-governance. Those policies are in
the course of being updated to reflect the NZX Corporate Governance
Code dated 1 April 2023.
The Company plans to substantially substantially comply with the
recommendations of the NZX Corporate Governance Code, except that
Sean Joyce will be an executive director rather than an independent
director (as defined in the NZX Listing Rules).
LISTING PROFILE39
Post completion of the Reverse Listing, in addition to their roles as
executive directors of the Company:
David McDonald will hold the position of Chief Executive Officer of the Being AI Group.
Katherine Allsopp-Smith will hold the position of Education Executive Director.
Sean Joyce will hold the position of Executive Chairman.
•
•
•
Proposed senior managers
The following personnel will hold senior management positions within the Company:
Nyssa Waters
Nyssa Waters is a dynamic and
experienced technology leader
with a remarkable 20 year career
across the tech sector, culminating
in her role as Co-Founder and
CEO of Being Consultants.
Nyssa is responsible for setting
the strategic direction of Being
Consultants, ensuring operational
efficiency, and leading the overall
management of the company,
overseeing financial planning, risk
management, and stakeholder
relations, while promoting
innovation and growth.
Prior to co-founding Being
Consultants, Nyssa held
several high-impact roles. At
Google, she notably served
as Head of Financial Services
for Google Cloud NZ, where
she has been instrumental in
devising strategies that leverage
Cloud, Data and AI to improve
operational efficiency and drive
business transformation
for clients.
She has led the strategic
development of cloud solutions
for the financial sector and
achieved a significant increase
in market penetration. As
Google Workspace Executive
for Australia and New Zealand,
she drove product and sales
initiatives across the region and
led significant revenue growth.
Nyssa is known for her innovative
and engaged approach which is
deeply rooted in understanding
client needs, developing
comprehensive business solutions,
and ensuring impactful, client-
centric outcomes across a number
of technology solutions, with a
deep understanding of various
technologies such as AI/ML,
Cloud, SaaS, and Infrastructure.
Her leadership style is
characterised by authenticity,
emphasising mentorship,
team development, and a truly
customer centric focus.
Her educational foundation
includes studying a Bachelor of
Social Sciences from Waikato
University and a Business
Management Certificate from
Waikato Institute of Technology,
alongside certifications in
technology leadership and sales
methodology from Google,
Telstra, and Spark NZ.
Nyssa takes pride in her personal
life, particularly in her role as
a mother and animal rescue
volunteer, which has taught her
invaluable lessons in leadership
and compassion. Her approach to
both her professional and personal
life reflects her commitment
to excellence, innovation, and
meaningful relationships.
Chief Executive Officer—
Being Consultants
LISTING PROFILE40
Dr. Nicolas Fourrier
Dr. Nicolas Fourrier holds the role of Chief Technology Officer of Being AI,
and is responsible for developing and implementing a technology vision and
strategy that aligns with the overall business goals of the company. He is a
distinguished technology leader, with extensive expertise in AI, machine
learning, and data science.
Dr. Fourrier's career is marked by a series of high-impact roles,
including his tenure as Head of Research at Futureverse. He has also held
a number of executive roles with the technology divisions of CCG,
Gameloft, Timbre, Bodog, Soul Machines, Insite AI, Consult Recruitment
and Rush Digital.
Dr. Fourrier holds a Master of Applied Mathematics from École
Supérieure d’Ingénieurs Léonard de Vinci, a Master of Science in
Mathematics and a Ph.D. in Mathematics from the University of Virginia.
Dr. Fourrier has authored over 15 publications in the fields of AI
and mathematics as well as over 10 patents and patents pending in AI.
This blend of theoretical insight and practical application in building AI,
ML, and data-driven solutions
from scratch sets him apart as a
rare talent in the industry.
Dr. Fourrier is a devoted father of
two and maintains a keen interest
in Judo and athletics in general,
reflecting commitment to a
balanced lifestyle.
Chief Technology Officer—Being AI
Paul ShalePaul holds the role of Chief
Marketing Officer of Being AI,
and is responsible for group’s
marketing, revenue generation
and equity value.
Paul holds a BCom/LLB
(Hons) from Auckland University,
tutored in Contract Law,
and was President of the Law
Students Society.
Paul worked as a commercial
lawyer for Russell McVeagh,
won the Deloitte Scholarship
at Auckland University and
worked for Deloitte in tax and
corporate valuation.
He then joined the Executive
Team at Auckland Airport as
Market Development Manager
before progressing to a career in
growth marketing.
Paul was Chief Executive
Officer at FCB NZ, Joint
Managing Director of Saatchi
& Saatchi NZ, CEO of
Roadtrippers Australasia (now
Roadpass), CCO of Nextspace,
has founded and exited several
of his own companies—including
Consortium NZ (earning the
AUT Decade Award), Consortium
USA (now Red Antler), and most
recently, Happy Cow Milk Co.
Chief Marketing Officer
—Being AI
LISTING PROFILE41
Mike Dunshea
Mike is Chief Financial Officer
of Being AI, and is responsible
for leading the development of
Being AI Group’s financial and
investment strategies, managing
investor relations, ensuring
compliance with financial
regulations and standards,
preparing budgets and forecasts,
and identifying and mitigating
financial risks.
Mike holds a Bachelor of
Management Studies from the
University of Waikato.
Mike is a Chartered Accountant
who qualified with KPMG in
Auckland. He has 22 years
of experience in operations
management and finance, which
has included working at Chase
Manhattan Bank (Luxembourg),
New Zealand Guardian Trust
and New Zealand Post. His three
primary roles over the last
13 years have been as Chief
Financial Officer at Grant
Thornton, New Zealand Home
Loans and Send Global
(since 2020).
Chief Financial Officer—Being AI
Erin Zink
Erin holds the role of Chief
Operating Officer of Being AI
and is responsible for executing
and sustaining corporate strategic
initiatives. By collaborating with
other executive team members,
Erin prioritises and delivers
quantifiable plans.
Prior to Being AI, Erin has held
roles as Head of Innovation
Operations at Futureverse,
and Head of Strategy as
Altered State Machine, both of
which are Web3, AI, and deep
technology companies.
Furthermore, Erin was CEO
and founder of Epic Instruction,
a USA domiciled cloud-based
VR, gamification and e-learning
creation company which
provides Web3 AI learning
solutions for businesses.
Erin holds a Master of Education
Technology (M.Ed) from Arizona
State University and a Bachelor of
Science in Nursing (BSN) from
the University of Arizona.
Erin is a resident of the United
States of America in the State of
Arizona, and has three children,
a rescue cat (named Elvis)
and a rescue Great Dane. Erin
participates in Brazilian jiu-jitsu
and volunteers as a registered
nurse in the State of Arizona.
Chief Operating Officer
— Being AI
LISTING PROFILE42
Paul Forno
Paul is Chief Executive Officer
of Send Global and is an
experienced executive, having
held senior executive positions
in various other large New
Zealand companies over the past
25 years. Paul has worked in the
government, not for profit, media
and education sectors. More
recently, Paul has worked in the
services sector, running his own
consultancy business. In addition
to his senior executive positions,
he has also held a number
of directorships in companies
across New Zealand.
Paul has been responsible for
driving several significant change
management programmes and
is known for his down to earth
approach, and as leader that gets
the best out of his team members.
Outside of his professional
career, Paul enjoys spending his
time with his wider family, the
outdoors, renovating properties
and contributing to various not
for profit organisations.
Chief Executive Officer
— Send Global
LISTING PROFILE43
How Being AI was valued
The Company negotiated the purchase price for 100% of the shares in the Being AI Group on a commercial
arms-length basis with the Vendors.
The Company’s Board is very comfortable with this valuation methodology having regard to
the following factors:
Purchase of BCL: the initial purchase price for 100% of the shares in BCL is $5 million and
may increase by a further $35 million in the future should certain share price milestones for
the Company’s share price be achieved pursuant to an Earn-In Mechanism (refer to page 45
of the Profile for further details). The purchase price is based on the Board’s evaluation of the
expertise and personnel assembled by BCL, and BCL’s potential to generate revenue and capital
growth from developing its proprietary technology and investing in technology-focused business
opportunities. The earn-in mechanism was developed to reward the Vendor of BCL for the
increase in share value of the Company that would largely be attributable to their performance
post completion of the Reverse Listing.
Being Consultants Limited has an experienced executive team (as evidenced in the biographical
details on page 17 of this Profile) capable of advancing the Being Consultants, Being Labs and
Being Ventures initiatives.
Purchase of SGL: the $25 million purchase price for 100% of the shares in SGL was based
on the Board’s evaluation of SGL’s financial performance over time and position in the market
(SGL operates in an oligopoly), and SGL’s potential to generate revenue in the future, gross
margins, brand strength and future growth potential.
The growth and investment opportunities for Being Consultants, Being Ventures and Being Labs
represent a genuinely exciting opportunity for the Company post restructure given the dynamic
nature of the AI and technology sectors.
Purchase of AGE: the $15 million purchase price for 100% of the shares in AGE was based on the
Board’s evaluation of the current financial performance of AGE, the cost to expand AGE School’s
existing facilities, regulatory compliance, AGE’s potential to generate revenue in the future,
gross margins, brand strength and growth potential via expansion of the existing school
footprint and ability to leverage into complementary educational verticals.
The Earn-In Shares will only be issued in full to the Vendor of BCL if the share price for the
Company appreciates by at least 600% following completion of the Reverse Listing, in which
case all the shareholders of the Company will also have benefited from an appreciation in the
Company’s share value. Please refer directly below for details of the earn-in mechanism, in
particular, the share price milestones required for the Earn-In Shares to be issued in full to the
Vendor of BCL. There can be no assurance that the value of ACE shares will increase by 600%
or any other percentage amount. However, this purchase price structure has been designed
to seek to align the interests of 2384 with the interests of all other shareholders.
i.
i.
ii.
ii.
iii.
iii.
LISTING PROFILE44
The body of the Being AI Group assets are two established businesses with long trading histories.
The Board anticipates that the true future growth potential of the Company, however, lies with
Being Consultants, Being Ventures and Being Labs.
The revenues and earnings for Send Global are steady.
The Board considers that Send Global and AGE School have a great deal of opportunity to
continue to grow both organically and via acquisitions.
Send Global has an experienced executive team well entrenched in the logistics
and parcels sector.
AGE School has an experienced executive team.
iv.
v.
vi.
vii.
viii.
LISTING PROFILE45
Details of the Earn-In Mechanism
The agreement entered into between the Company and the Vendors of the Being AI Group provides for an
upwards adjustment to the total purchase price payable by the Company for the shares in BCL (BCL Purchase
Price), subject to the Company achieving certain share price milestones after completion of the Reverse Listing.
Any adjustment to the BCL Purchase Price will be satisfied through the issue of ACE shares at an issue price of not
less than $.025 per share.2 All Earn-In Shares issued will be subject to a trading restriction such that the recipient
shall not be entitled to sell, mortgage or otherwise deal in those ACE shares for a period of 12 months from the
date of issue. Further details of the adjustment mechanism are set out in the table below.
Adjustment of BCL Purchase Price and issue of additional Shares
MilestoneCalculation Date3Share price milestone4Adjustment of BCL Purchase Price
5
1Not earlier than 9 months
from completion
$0.04 — $0.05A further $9,333,280 up to a
maximum of $11,666,600 if the VWAP
exceeds $0.05
2Not earlier than 18 months
from completion
$0.08 — $0.10A further $9,333,280 up to a
maximum of $11,666,600 if the VWAP
exceeds $0.10
3Between 24 and 36 months
from completion.
$0.12 — $0.15A further $9,333,280 up to a
maximum of $11,666,600 if the VWAP
exceeds $0.15
4Not later than 36 months
from completion
$0.30A further $34,999,800 less any
adjustments of the BCL Purchase Price
achieved under milestones 1 to 3
2 The Company does not have a right to claw back any Earn-In Shares issued if the share price subsequently drops below
the applicable share price milestone following the relevant calculation date.
3 The relevant share price milestone calculation will take place at time of 2384 LP’s choosing after the relevant calculation date
shown in the table.
4 Share price milestones will be calculated using the volume weighted average price (VWAP) of ACE shares in the preceding 90 days
from the date of calculation for milestones 1 to 3, and 6 months from the date of calculation for milestone 4.
5 New shares will be issued at an issue price of $.025 each.
LISTING PROFILE46
Substantial Shareholders
and Relevant Interests Held,
by Directors & Senior Managers, etc
Current substantial shareholders of the Company
As at 7 March 2024, the following shareholders have a relevant interest
in 5% or more of the shares in the Company.
Product holders with relevant
interests in 5% or more of a class
of relevant securities
Legal ownership or other nature
of the interest
Number
of relevant
securities held
% of relevant
securities held
(to 2 decimal places)
Lindsey Investment TrustLegal and beneficial owner3,331,78115.50%
Excalibur Capital Partners LimitedLegal and beneficial owner2,336,41210.87%
Trinity Portfolio Limited,
Joseph Van Wijk
Trinity Portfolio Limited is
the legal holder; Joseph Van Wijk
is the beneficial owner
1 , 9 47, 2 2 79.06%
Rochdale Investments LimitedLegal and beneficial owner1,451,4406.75%
To t a l9,066,86042 .1 8%
SUBSTANTIAL PRODUCT HOLDERS PRIOR TO THE REVERSE LISTING ↓
LISTING PROFILE47
Substantial Shareholders of the Company if the Reverse Listing completes
If the Reverse Listing completes, the persons listed in the table below are likely to have a relevant interest
in 5% or more of the shares in the Company. The information is based on the following assumptions:
Based on those assumptions, there will be 1,868,018,828 Shares on issue immediately following
completion of the Reverse Listing.
The total number of shares to be on issue immediately after completion of Reverse Listing is 1,868,018,828.
prior to raising any additional capital in the period between announcement and completion
of the Reverse Listing, the Company has 21,498,828 Shares on issue;
in order to capitalise the sum of $768,000 of the existing indebtedness of the Company
to Excalibur Capital Partners Limited, the Company will, at completion of the Reverse Listing,
issue 30,720,000 Shares to Excalibur Capital Partners Limited (Excalibur Shares); and
in order to capitalise the sum of $395,000 of the existing indebtedness of the Company
to the four directors of the Company in respect of accrued but unpaid directors’ fees,
the Company will, at completion of the Reverse Listing, issue 15,800,000 Shares to the four
directors (in aggregate) (Directors’ Fee Shares); and
in order to satisfy the consideration payable to entities associated with the Vendors of the
Being AI Group, the Company will, at completion of the Reverse Listing, issue 1,800,000,000
Shares to the Vendors (Consideration Shares); and
the Company does not issue up to a further 120,000,000 new fully paid ordinary shares in the
Company to investors to raise additional capital (Capital Raise Shares).
i.
ii.
iii.
iv.
v.
Product holders with relevant
interests in 5% or more of Shares
Legal ownership or other nature
of the interest
Number
of Shares held
% of Shares held
(to 2 decimal places)
2061 LPLegal and beneficial owner1,270,000,0006 7. 97 %
Te Turanga Ukaipo Charitable TrustLegal and beneficial owner250,000,00013.38%
2384 LPLegal and beneficial owner200,000,00010.71%
Excalibur Capital Partners LimitedLegal and beneficial owner96,000,0005 .14%
To t a l1,816,000,0009 7. 2 0 %
SUBSTANTIAL PRODUCT HOLDERS IMMEDIATELY FOLLOWING COMPLETION OF THE REVERSE LISTING ↓
LISTING PROFILE48
Current shareholdings held by proposed directors & senior managers
Shareholdings of proposed directors & senior managers following the Reverse Listing
As of the date of this Profile, the only proposed director or senior manager who has a relevant interest
in any Shares in ACE is Sean Joyce, who, through his investment vehicle Excalibur Capital Partners Limited,
holds 2,336,412 ACE shares.
Immediately following the completion of the Reverse Listing, the following proposed directors and senior
managers are expected to hold Shares:
Katherine Allsopp-Smith (and Evan Christian as alternate director for Katherine):
1,520,000,000 ACE shares (jointly held through 2061 and Te Turanga Ukaipo).
David McDonald: 200,000,000 ACE shares (held through 2384).
Sean Joyce: 96,000,000 ACE shares (held through Excalibur).
•
•
•
Lock-up arrangements
2061 LP, Te Turanga Ukaipo, 2384 and Excalibur will not be subject to any restrictions on the disposal of ACE
shares following completion of the Reverse Listing. As at the date of this Profile, none of these persons has
indicated any present intention to dispose of the shares issued on completion of the Reverse Listing, however
they reserve the right to do so.
Existing or former directors Keith Jackson, John Cilliers, Roger Gower, Sean Joyce, and Joe van Wijk, have agreed
to enter into restricted security agreements on completion of the Reverse Listing to formalise their agreement
not to deal in 15,800,000 ACE shares in aggregate in respect of accrued directors’ fees for the 6-month period
following completion of the Reverse Listing. However, these restrictions will not apply in relation to any full or
partial takeover offer made under the Takeovers Code or similar scheme of arrangement.
LISTING PROFILE49
Options to acquire shares in the Company
In the 12-month period immediately following the Reverse Listing, should it complete, it is proposed that up to
a maximum of 132,000,000 new options to acquire up to 132,000,000 shares in the Company (Options) may be
issued to non-executive directors, senior executives, and current and future employees of the Being AI Group.
The principal terms of the Options are as follows:
The parties to whom the Options are to be issued, and the amounts in which they are to be allotted have not
been finalised as at the date of this Profile.
Nature of security — an Option to acquire one ordinary fully paid share in the Company;
Exercise Price — not less than $0.025 per Option exercised, which shall be payable in cash
on the date of the exercise of the Option;
Vesting — the Options shall vest in the Option holder over five years in five equal tranches
starting on the first anniversary of the date of their issue;
Term of Option — the Options must be exercised within five years from relevant vesting date,
after which date the Option shall lapse (unless the Option holder ceases to be employed or
engaged by the Company or one of its subsidiaries, other than due to death or illness, in which
case the Options that have not vested at that time will terminate and any vested, but unexercised
Options, must be exercised within 30 days of the holder’s cessation of employment or service or
those Options will lapse).
i.
ii.
iii.
iv.
LISTING PROFILE50
Director remuneration and benefits
The directors will receive the remuneration set out below:
Director or
proposed director
Director feesExpected renumeration and
value of other benefits6
Nature of services
provided
David McDonaldNil$415,000 annual salaryServices commensurate with that of a
Chief Executive Officer
Katherine
Allsopp-Smith
Nil$125,000 annual salaryServices commensurate with that of
an Education Director
Sean JoyceNil$250,000 annual salaryServices commensurate with that
of an Executive Chairman of a public
listed company
Joe Jensen$65,000 per annum5 million Options to acquire
shares in the Company,
plus a further 5 million Options
in two years
Independent Non-Executive Director
Roger Gower$65,000 per annum3 million Options to acquire
shares in the Company,
plus a further 3 million Options
in two years
Independent Non-Executive Director
6 David McDonald, Katherine Allsopp-Smith and Sean Joyce will not receive any Options.
LISTING PROFILE51
Renumeration rangeNumber of employees
$430,001 – $440,0001
$350,001 – $360,0004
$300,001 – $310,0002
$250,001 – $260,0003
$240,001 – $250,0001
$210,001 – $220,0001
$150,001 – $160,0002
$120,001 – $130,0001
$110,001 – $120,0001
$100,000 – $110,0001
Employee
remuneration over
$100,000 per annum
Following completion
of the Reverse Listing, the
Being AI Group expects to
have 36 employees. Of these
36 employees, 17 employees
will have a total remuneration in
excess of $100,000 as follows:
The Being AI Group expects that it will hire further employees during
the 12 month period following completion of the Reverse Listing.
As with any business, the Being AI Group will hire further employees
subject to the then needs of the Being AI Group at the time of seeking
to hire additional staff.
LISTING PROFILE52
Key features
of the shares
LISTING PROFILE53
Key features of the shares
Shares following Reverse Listing
Following completion of the Reverse Listing, the Company will have 1,988,018,828 Shares on issue (assuming
all shares contemplated by the Restructure are issued, except for the Earn-In Shares), which will all be quoted
on the NZX Main Board. Each Share gives the holder the right to:
in addition to other rights as a shareholder conferred by the Companies Act 1993 (Companies Act)
and the Company’s Constitution.
attend and vote at a meeting of the Company, including the right to cast one vote per Share
on a poll (subject to any voting prohibitions under the NZX Listing Rules);
an equal share with other Shares in any dividends authorised by the Board;
an equal share with other Shares in the distribution of surplus assets in any liquidation
of the Company; and
be sent certain information by the Company;
i.
ii.
iii.
iv.
Dividend policy
No guarantee of Shares
The Vendors have no current plans for the Company to pay dividends following the Reverse Listing.
Any profits will be reinvested to promote the growth of the Being AI Group’s business. If this strategy is
successful, shareholders will benefit from an increase in the intrinsic value of the business.
Any dividends will be declared and paid at the discretion of the Company’s directors from time to time and
will be declared subject to the Company meeting appropriate financial requirements.
No person or entity guarantees or undertakes any liability in respect of the Shares or the future value
or performance of them.
LISTING PROFILE54
Consequences of insolvency
Alteration of Shares
Restriction on “same class” offer
No Shareholder will be liable to pay any further amounts to the Company or any other person in respect
of those Shares if the Company becomes insolvent.
In a liquidation of the Company, the claims of Shareholders will rank equally with the claims of other
Shareholders, and after the claims of:
The rights attached to the Shares are governed by the Company’s constitution, the Companies Act
and the terms under which they have been issued. The constitution may only be altered by special resolution
of shareholders subject to the rights of interest groups under the Companies Act, or in certain circumstances
by Court Order. A special resolution of shareholders must be approved by 75% of eligible shareholders voting
on that resolution. In certain circumstances, a Shareholder whose rights are affected by a special resolution
may require the Company to purchase their Shares.
The Company has agreed with NZX as part of its conditions of listing that, following the Reverse Listing,
it will not undertake a capital raising which relies on the “same class offer” exclusion (“same class offer”) in clause
19 of Schedule 1 of the FMCA, until after the release of audited financial statements by the Company for the
financial year ended 31 March 2024.
In any event, under the FMCA the Company is not able to use the “same class offer” exclusion until 3 months
after a change in the essential nature of its business. In this case the Company is changing the essential nature
of its business from the date of completion of the Reverse Listing, so the earliest the Company could undertake
a “same class offer” is 29 June 2024.
persons to whom preferential payments must be made;
secured creditors; and
unsecured creditors.
•
•
•
LISTING PROFILE55
Financial
information
LISTING PROFILE56
Financial information
This section contains the following financial information about the Company and the Being AI Group:
No financial information required to be disclosed under schedule 3 of the FMC Regulations is available for
Being Consultants Limited (and its wholly-owned subsidiaries Being Ventures Limited and Being Labs Limited)
as each of these entities are recently established and have not yet completed an accounting period. All of the
value attributed to Being Consultants Limited is in the nature of intangible assets.
There is no financial information available in respect of the Being AI Group apart from the information
provided below.
If you do not understand this financial information, you can seek advice from a financial adviser
or an accountant.
select financial information from the audited financial statements for Send Global Limited
for the financial year ended 31 March 2023;
select financial information from the unaudited financial statements for Send Global Limited
for the financial years ended 31 March 2021 and 2022;
select financial information from the unaudited financial statements for Send Global Limited
for the six-month period ended 30 September 2023;
select financial information from the audited financial statements for AGE Limited for
the financial years ended 31 December 2020, 2021, and 2022;
select financial information from the unaudited financial statements for AGE Limited for
the nine–month period ended 30 September 2023;
select financial information from the audited financial statements for the Company (ACE)
for the financial years ended 31 March 2021, 2022, and 2023;
select financial information from the unaudited financial statements for the Company (ACE)
for the nine-month period ended 30 September 2023 (full audited financial statements for the
Company (ACE) are available at ascensioncapital.co.nz); and
the pro-forma financial position of the Being AI Group as at 30 September 2023, and the pro-
forma financial performance for the six month period ending 30 September 2023.
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
LISTING PROFILE57
The information used to prepare the financial information relating to Send Global Limited and AGE Limited has
been derived from the audited and unaudited financial statements prepared by Send Global Limited and AGE
Limited respectively. As at the date of this Profile, Being Consultants Limited (and its wholly owned subsidiaries
Being Ventures Limited and Being Labs Limited) is not required to have its financial statements audited.
The financial information below, including the pro-forma financial information, has been prepared in accordance
with NZ IFRS accounting standards and is GAAP (Tier 2) compliant, except for AGE which has been prepared to
comply with Ministry of Education requirements.
Following completion of the Reverse Listing, the Being AI Group will prepare, and have audited, group financial
statements for Being AI Group under Tier 1 IFRS. To date, as a privately owned company, the financial statements
prepared for Being AI Group have been prepared under Tier 2 IFRS standards. While there is not expected to be
any material differences in the amounts disclosed under each tier, Tier 1 IFRS requires greater detail in the notes
to the financial statements and certain reduced disclosure concessions do not apply.
Important information
LISTING PROFILE58
Financial
information
6 months to
30 September 2023
(unaudited) (’000)
12 months to
31 March 2023
(audited) (’000)
12 months to
31 March 2022
(unaudited) (’000)
12 months to
31 March 2021
(unaudited) (’000)
Revenue18,702 341,843 36,94332,269
EBITDA1,571 32,824 13,1042,507
Net profit after tax677 3281 2,224(548)
Dividends on all equity
securities of the issuer4
537 0538919
Total assets515,891 23,155 26,35623,079
Cash and cash equivalents2445 3,133 1,4632,641
Total liabilities59,072 16,206 19,68818,097
Total debt2,142 1,309 6,8568,690
Net cash flows from
operating activities6
(3,139)5,199 2,0731,468
SEND GLOBAL LIMITED CONSOLIDATED SELECTED FINANCIAL INFORMATION ↓
1 The $2.8 million normalised EBITDA for the year ended 31 March 2023 excludes exceptional items (G3 Medical close down costs
($233,000), prior year costs expensed in the 2023 financial year ($154,000), subvention payments to associated entities that will not be
part of Being AI Limited ($2.1 million), and a capital gain on the sale of Send Global’s property in Avondale, Auckland ($1.1 million)).
2 The negative cash flow for the six months to September arises from a large advance purchase of inventory in April to improve full year
profitability. This is an annual initiative (see note 5).
3 Doubling the 6-month interim financial information to make it comparable to the 12 month 31/3/2023 information. Revenue drops
by $4 million because of the loss of one large customer. However, the impact on EBITDA is only $200,000. EBITDA increases to $3
million because an of improved pricing strategy and a change in the mix of products with an increase in the proportion receiving higher
margins. Net Profit after tax increases to $1.4 million because of improved margins and because the 31/3/23 number includes subvention
payments.
4 A $537,000 dividend was paid to the shareholder in the first half of the 2024 financial year.
5 The decrease in assets and liabilities reflect the sell down of inventory purchased in February 2023. This usually happens every year as
the company purchases inventory at comparatively low cost in Q4 of the financial year and then sells that inventory when those costs
have risen. This purchase is funded by bank debt, drawn down in April and repaid by January.
6 Send Global’s positive cash flows are to expected to cover operating costs of AGE and BCL where necessary and in the event future
capital raising is unsuccessful. Despite Send Global’s positive cashflows being limited (as noted above), the Board has considered and
are comfortable that the Company has sufficient surplus capital going forward to fund any working capital requirements associated with
the Being AI Group. The presentation of net cash flows from operating activities in the historical financial information provided for Send
Global and AGE includes items that would not apply had either of the companies been publicly owned or part of the proposed ownership
structure of the Being AI Group.
LISTING PROFILE59
Financial
information
9 months to
30 September 2023
(unaudited)
12 months to
31 December 2022
(audited)
12 months to
31 December 2021
(audited)
12 months to
31 December 2020
(audited)
Revenue1,439,0003,274,8162,734,1821,779,581
EBITDA1194,000525,386445,544204,810
Net profit after tax091,460108,35825,231
Dividends on all equity
securities of the issuer
0000
Total assets5,068,0005,131,0365,413,5755,167,969
Cash and cash equivalents293,000208,63299,09735,435
Total liabilities4,765,0004,827,8095,201,8095,176,670
Total debt2,976,0002,822,4883,723,2424,367,173
Net cash flows from
operating activities2
(61,563)(790,488)(644,152)(1,051,045)
AGE LIMITED SUMMARY FINANCIAL INFORMATION ↓
The audited consolidated financial statements for Send Global Limited and financial statement for AGE Limited,
referred to above, will be available for viewing at nzx.com/companies/ACE/documents
LISTING PROFILE60
Financial
information
9 months to
30 September 2023
(unaudited)
12 months to
31 December 2022
(audited)
12 months to
31 December 2021
(audited)
12 months to
31 December 2020
(audited)
Revenue411499161400
EBITDA1(84,406)(156,797)(170,811)(150,931)
Net profit after tax(86,370)(160,508)(171,171)(150,531)
Dividends on all equity
securities of the issuer
0000
Total assets37,88826,46829,18174,566
Cash and cash equivalents2,5305504,08049,085
Total liabilities856,407822,189664,394538,608
Total debt792,015749,641595,431369,910
Net cash flows from
operating activities
(61,595)(73,530)(90,005)(112,139)
SELECTED FINANCIAL INFORMATION OF THE COMPANY — ACE ↓
The financial information for the Company for FY 2021, 2022 and 2023 and the six months to 30 September 2023
has been sourced from the Company’s previously published audited financial statements.
The Vendors and the Company have resolved to not include prospective financial statements for the financial
years to 31 March 2024 or 31 March 2025 as permitted by NZX Listing Rule 7.4.1(a).
No future period prospective financial information
LISTING PROFILE61
Set out below is the pro-forma financial position of Send Global, AGE, ACE and Being Consultants
(including its subsidiaries) as at 30 September 2023, and the pro-forma financial performance for the six month
period ending 30 September 2023. The pro-forma information presents the statement of financial position
as if the Reverse Listing had completed on 30 September 2023. However, this information does not include
any fair value adjustments or any changes to the capital structure to reflect the manner in which the group
is intended to be run following completion of the Reverse Listing, apart from the settlement of debt in ACE through
the issue of new shares. The information provided shows the underlying financial performance of the companies
in the new group and does not include any impact to net profit that will arise when recognising the acquisitions
in the consolidated financial statements of the new group post the Reverse Listing.
Financial statements for the Being AI Group, including Send Global, AGE, ACE and Being Consultants
(including its subsidiaries as at, and for the 12-month period ending 31 March 2024, will be drawn up for release
to NZX before the end of May 2024 and for inclusion in the Being AI annual report before 30 June 2024.
Pro-forma financial information for the Being AI Group
Financial
information
Send Global
(unaudited)
$000
AGE
(unaudited)
$000
Being
Consultants1
(unaudited)
$000
ACE
(unaudited)
$000
Pro-forma
Adjustments3
(unaudited)
$000
Pro-forma
(unaudited)
$000
Revenue18,702 1,439 00(238)19,903
EBITDA1,560 194 0(84)(118)1,552
Net profit after tax660 0 0(86)(234)340
Dividends on all equity
securities of the issuer
538 0000538
Total assets15,924 5,068 0386,55227,582
Cash and
cash equivalents
445239030741
Total liabilities
(including debt)
8,8534,765085629114,765
Total debt2,1422,9760792(1,163)4 ,747
BEING AI GROUP PRO-FORMA INFORMATION AS AT 30 SEPTEMBER 2023 ↓
LISTING PROFILE62
1 Being Consultants was established in October 2023 and accordingly had nil assets and liabilities as 30 September 2023.
2 The asset and liability positions for Send Global, AGE and ACE as at 30 September 2023 have been drawn from the respective
statements of financial position as at that date for Send Global, AGE and ACE.
3 The pro-forma adjustments column reflects the capitalisation of debt in ACE and the issue of new share capital to the Vendors, as if they
had taken placed on 30 September 2023 and adjustments to the lease accounting for AGE to reflect full application of IFRS.
LISTING PROFILE63
Risk to the
Being AI Group’s
business and plans
LISTING PROFILE64
Risks to the Being AI Group’s
business and plans
This section sets out the key circumstances the Vendors are aware of
that exist or are likely to arise that significantly increase the risk to the
Being AI Group’s financial position, financial performance or stated plans.
The table below contains information which the Vendors consider
relevant to an assessment of the likelihood, nature and potential
magnitude of the impact of the risks. These risks are based on the
knowledge and assessment of the directors as at the date of this Profile.
It is possible that other risks may emerge or develop over time.
Being Consultants
What is the risk?As a newly established business, the success of the Being Consultants business
(and its subsidiaries, Being Ventures and Being Labs) is largely reliant on the ability
of the business to grow new customer relationships and develop new business.
There is no guarantee that new contracts for services will be secured. In the
event new contracts for services are not secured, the business will fail to generate
meaningful revenue.
Why is it significant to the Being AI Group?In the event that significant new contracts are not entered into, this would have
an adverse impact on the ongoing cash flow and revenues to be generated by
Being Consultants, Being Ventures and Being Labs Limited.
Information to assist assessment
of the likelihood, nature and potential
magnitude of the risk
The reliance of Being Consultants on securing new contracts is in part mitigated by
the diversification of its business operations, insofar as Being Ventures also invests
in technology related companies and Being Labs develops its own proprietary
intellectual property, products and services.
In addition, Being Consultants, through Being Ventures, intends to grow further by
the acquisition of complementary businesses as and when identified.
RELIANCE ON SECURING SIGNIFICANT CONTRACTS AND SERVICES ↓
LISTING PROFILE65
Being Consultants, Send Global and AGE School
What is the risk?The Being AI Group’s operations are heavily reliant on certain key personnel:
• In the case of Being Consultants – David McDonald, Nyssa Waters,
and Nicolas Fourrier
• In the case of AGE – Andrea Tong
• In the case of Send Global – Paul Forno.
If any of the key personnel were to leave the various companies comprising the Being
AI Group, its operations and financial performance may be affected.
Why is it significant to the Being AI Group?Being AI Group is particularly dependent on its key personnel. If the Company
were to lose the services of key individuals (while not anticipated), this could have
a material adverse effect on its future performance until the skills that are lost are
adequately replaced.
Information to assist assessment
of the likelihood, nature and potential
magnitude of the risk
If the Reverse Listing completes, each of David McDonald and Nyssa Waters will hold,
through their related parties, (collectively) approximately 10.71% of the Company
(assuming the Company does not issue the Capital Raise Shares). Mr Forno will hold
options to acquire shares in the Company post completion of the Reverse Listing.
Accordingly, Messrs Forno and McDonald, and Ms Waters and Ms Zink are
incentivised to deliver business growth and achieve the Being AI Group’s goals, which
reduces the likelihood that they will leave the Being AI Group.
DEPENDENCE ON KEY PERSONNEL ↓
LISTING PROFILE66
Send Global
What is the risk?The logistics, business mail, courier and file management sectors in New Zealand
are competitive.
One or more of Send Global’s competitors could seek to offer comparable services
at lower prices, which might cause downward pressure on Send Global’s pricing
and ability to create margin and revenue. One or more competitors could also offer
comparable services which are preferred by the market leading to reduced demand
for Send Global’s services, or may be successful in securing major new contracts or
developing new technologies. New competitors may also enter the market.
Why is it significant to the Being AI Group?The actions of competitors and the emergence of new competitors may put
pressure on the prices that Send Global can charge for its services or reduce the
level of its business, both of which could negatively affect the Company’s business,
financial condition and results.
Information to assist assessment
of the likelihood, nature and potential
magnitude of the risk
The Send Global brand has positioned itself with a point of difference in the verticals
in which it operates with respect to service quality, excellence, and “look and feel”
and considers it is well placed to stand out against the competition.
The Vendors expect that they will be able to mitigate this risk given their experience
in the industry, understanding of Send Global’s sectors, and with assistance from
Send Global’s experienced Senior Leadership Team.
SIGNIFICANT COMPETITION IN RELEVANT SECTORS ↓
LISTING PROFILE67
All business divisions within the Being AI Group
What is the risk?The Being AI Group intends to expand its commercial operations organically
and through strategic acquisitions. Should it not successfully identify the right
acquisition opportunities, its operational and financial performance will be
adversely affected.
While Being AI conducts thorough due diligence as part of any proposed
acquisition, it is possible that one or more material issues or liabilities may not have
been identified or may be more significant than expected and that Being AI may
not be adequately compensated or protected against liability in relation to the
representations, warranties and indemnities provided by the vendor of the
relevant business.
Why is it significant to the Being AI Group?The Being AI Group is seeking to pursue substantial growth initiatives, including
expansion into new commercial verticals and new markets within the technology
sector. If the Being AI Group succeeds, the number of customers it serves and the
operating complexities it faces will increase.
The Being AI Group also needs to carefully and seamlessly manage the integration of
new employees from businesses acquired into their own business operations.
The Being AI Group expects that significant growth and increased operating
complexity will place additional demands on its operating systems as well as
personnel. If the Being AI Group’s operating systems, personnel or distribution
networks are unable to keep pace with these demands, the Company’s business,
operating results and financial condition may be materially adversely affected.
Information to assist assessment
of the likelihood, nature and potential
magnitude of the risk
The Vendors have a track record of successfully acquiring businesses in other
ventures in which they have previously been involved. However, there is no guarantee
that Being AI will be successful in obtaining its operational and strategic goals
through such acquisitions.
FAILURE TO EFFECTIVELY MANAGE GROWTH OPPORTUNITIES ↓
LISTING PROFILE68
All business divisions within the Being AI Group
What is the risk?There is a risk that the Company will fail to raise sufficient capital for implementation
of business strategies of the Being AI Group, particularly, Being Consultants, Being
Ventures and Being Labs, which are all early-stage businesses with venture capital
type risk profiles.
Why is it significant to the Being AI Group?A significant portion of the growth and investment opportunities available to the
Being AI Group would be capitalised by Being Consultants, Being Ventures and Being
Labs, which are reliant on raising future capital to take advantage of these growth
and investment opportunities.
Furthermore, the expansion of AGE to new sites and of Send Global to new
geographic markets will also likely require additional capital.
Information to assist assessment
of the likelihood, nature and potential
magnitude of the risk
The Company has an experienced executive team equipped to advance the
developed business strategies of each company within the Being AI Group.
Furthermore, the Company has received expressions of interest from multiple
investors willing to provide capital to the Company, including by subscribing for the
Capital Raise Shares.
FAILURE TO RAISE SUFFICIENT CAPITAL TO IMPLEMENT BUSINESS STRATEGIES ↓
Send Global and Being Consultants
What is the risk?There is a risk that the Being AI Group will fail to successfully execute its strategy in
new markets and new verticals.
Why is it significant to the Being AI Group?The Being AI Group believes there are significant opportunities in promoting
its services (in the consulting vertical via Being Consultants) in New Zealand
and Australia.
Accordingly, the Being AI Group has medium and long-term ambitions to expand into
other geographical markets and other market verticals.
Information to assist assessment
of the likelihood, nature and potential
magnitude of the risk
The Vendors believe they have sufficient previous experience operating in the Being
AI Group’s target markets, which they believe they can leverage to successfully
execute the Being AI Group’s strategy.
The Being AI Group’s existing capital, and additional capital to be raised by the
Company prior to completion of the Reverse Listing, will enable the Being AI Group
to fund growth opportunities and to employ further staff to manage growth in these
new markets and to take advantage of the contacts that the Vendors have already
established in these markets.
UNSUCCESSFUL ENTRY INTO NEW GEOGRAPHIC MARKETS & NEW VERTICALS ↓
LISTING PROFILE69
General risks such as changes in general economic conditions, new
legislation, tax reform, changes in interest and inflation rates may also
have an adverse impact on Being AI's business and activities, and on its
ability to fund its ongoing business operations.
Being Consultants and AGE
What is the risk?There is a risk that significant legal and regulatory change to the AI and education
sectors will interfere with the ability of Being Consultants and AGE to implement
business strategies.
Why is it significant to the Being AI Group?The Being AI Group believes there is significant opportunities in the education
and AI sectors, which are both subject to increasing legal and regulatory scrutiny in
New Zealand.
Information to assist assessment
of the likelihood, nature and potential
magnitude of the risk
The new coalition government comprising the National Party, ACT Party and New
Zealand First has indicated an intention to reintroduce the charter school model,
which AGE may benefit from.
Being Consultants has an executive team equipped with the experience to navigate
and harness any regulation of AI that may impact the business strategies of Being
Consultants and its subsidiaries.
SIGNIFICANT LEGAL AND REGULATORY CHANGES ↓
LISTING PROFILE70
Ta x
LISTING PROFILE71
Ta x
Tax can have significant consequences for investments.
If you have queries relating to the tax consequences
of investing in Shares, you should obtain professional
advice on those consequences.
LISTING PROFILE72
Where you can find
more information
LISTING PROFILE73
Where you can find
more information
The existing debt within AGE and Send Global which is currently provided
by Wilshire Treasury (a related party of 2061) will be refinanced directly
with a trading bank upon completion of the Reverse Listing.
Under the AGE constitution, 2061 LP holds a first right of refusal to
acquire all, or substantially all, of the AGE shares or business assets
and undertakings from the Company in the event the Company wishes
to transfer all of the AGE shares or business assets and undertakings.
2061’s first right of refusal is subject to 2061 and its associates
(as defined in the Takeovers Code) together holding or controlling
at least 5% of the Shares.
Excalibur acquired 13.3% of AGE from 2061 LP after the announcement
of the Reverse Listing Transaction in December 2023 for a cost of
$2 million (equivalent to $15 million for 100%). As part of the acquisition,
Send Global advanced Excalibur the funds to purchase
the shares on the basis of a five year, secured, interest free loan.
2061 LP has agreed to lend the Company an amount up to a maximum
of $5 million, subject to the Company having in place other direct funding
arrangements from a bank lender. Any such loan could be drawn down
and/or repaid in one or more tranches from time to time by mutual
agreement between 2061 LP and the Company. Interest on the 2061
standby loan will be charged at an annual rate equal to the ANZ Business
Overdraft Base Rate.
Refinancing
of existing AGE and
Send Global debt
AGE Constitution
Other material information
Send Global loan
2061 LP standby loan
LISTING PROFILE74
Under Listing Rule 4.5, the Company is permitted to issue up to 15% of
the shares on issue in the previous 12 months plus any shares issued
with shareholder approval otherwise permitted to be issued under the
Listing Rules. The total number of shares to be on issue immediately after
completion of the Reverse Listing (being those held in the last 12 months
or to be issued with approved by shareholders) is 1,868,018,828 shares.
In addition to the authority sought to issue the Capital Raise Shares,
the Company could, in theory, issue approximately a further
280,202,824 shares under the Listing Rule 4.5 (being 1,302% of the
21,498,828 shares currently on issue and 13% of the 2,148,221,652
shares that would be on issue if all 280,202,824 shares were issued).
This calculation excludes Capital Raise Shares and Earn-In Shares
for the purposes of calculating 15%.
15% placement capacity
The timetable for the Restructure is anticipated to be as follows:
In the event that ACE shareholders do not approve the Restructure,
ACE would apply to NZX for the suspension of the trading in shares in ACE
to be lifted following the date of the Special Meeting.
Timetable
EventDate
Special Meeting of Shareholders
to be held
10am on 28 March 2024
Issue of Consideration Shares,
Excalibur Shares, Capital Raise Shares
and Directors’ Fees Shares, change of
name of ACE, restructure of the ACE
Board of Directors (Completion Date)
by 5pm on 28 March 2024
Lifting of suspension of trading
in ACE shares
by 5pm on 28 March 2024
Name change and listing code
effective on NZX
2 April 2024
LISTING PROFILE75
Further information relating to the Being AI Group can be found at
beingconsultants.ai, sendglobal.com and age.school.nz
The New Zealand Companies Office register also contains information
about the various companies within the Being AI Group, which can be
viewed at business.govt.nz/companies
The Company is required to make half yearly and annual announcements
to NZX as well as certain other announcements required by the
NZX Listing Rules from time to time. Following completion of the Reverse
Listing, you will be able to obtain this information by searching nzx.com
for the ticker code ‘BAI’
Other information
The Company is also seeking authority to issue a further 280,000,000
post completion shares. If issued, the allotment of these shares will also
increase the 15% capacity by 15%. The effect of issuing these additional
post completion shares and the Capital Raise Shares, with Listing Rule 4.5,
is that the Company will have the ability to undertake larger placement
capital raises than the normal 15% limit under the Listing Rules.
In addition to the authority to issue a further 280,000,000 post
completion shares and the Capital Raise Shares, the Company could,
in theory, issue approximately a further 340,202,824 shares under the
Listing Rule 4.5 (being 1,582% of the 21,498,828 shares currently on
issue and 13% of the 2,608,221,652 shares that would be on issue if all
340,202,824 shares were issued).
While Listing Rule 4.5 contains permission to issue shares without
shareholder approval of up to the 15% capacity limit, as at the date of
this Notice the Company has no present intention to issue further shares
under Listing Rule 4.5 but reserves a right to do so.
LISTING PROFILE76
Contact information
LISTING PROFILE77
Contact information
Addressc/o Duncan Cotterill, Level 5, Tower Building, 50 Customhouse Quay, Wellington,
6143, New Zealand
Contact personSean Joyce
Email addresssean@corporate-counsel.co.nz
Websiteascensioncapital.co.nz
Address17 South Street, Auckland Central, Auckland 1010
Contact personDavid McDonald
Email addressdavid@beingconsultants.ai
Websitebeingconsultants.ai
AddressLevel, 2/159 Hurstmere Road, Takapuna, Auckland 0622
Email addressenquiry@computershare.co.nz
ASCENSION CAPITAL LIMITED ↓
BEING AI GROUP ↓
SHARE REGISTRAR — COMPUTERSHARE LIMITED ↓
LISTING PROFILE78
Contact personSean Joyce
Email addresssean@corporate-counsel.co.nz
Contact personRoger Wallis
OrganisationChapman Tripp
Contact personIgor Drinkovic
OrganisationMinster Ellison
COMPANY’S LEGAL ADVISER — SEAN JOYCE, CORPORATE COUNSEL ↓
LEGAL ADVISOR TO THE VENDOR OF SEND GLOBAL & AGE LIMITED ↓
LEGAL ADVISOR TO THE VENDORS OF BEING CONSULTANTS LIMITED ↓
LISTING PROFILE79
Glossary of terms
AIArtificial Intelligence
AGEAGE Limited
BCL Purchase PricePurchase price payable by the Company for all shares in BCL.
Being AI GroupBeing Consultants, Send Global, and AGE (including any wholly owned subsidiaries)
Being Consultants or BCLBeing Consultants Limited (including its wholly owned subsidiaries, Being Labs
and Being Ventures)
Being LabsBeing Labs Limited
Being VenturesBeing Ventures Limited
Capital Raise SharesUp to a further 120,000,000 fully paid ordinary shares in the Company issued to investors
identified by the Company at an issue price of not less than $0.025 per share to raise
additional new capital post completion of the Reverse Listing.
Companies ActCompanies Act 1993
Company or ACEAscension Capital Limited (to be renamed Being AI Limited post Completion).
Completion Date or CompletionCompletion of the Reverse Listing.
Consideration Shares1,800,000,000 fully paid ordinary shares in the Company issued to the Vendors at an i
ssue price of $0.025 per share as consideration for the purchase of all of the shares in BCL,
SGL and AGE.
Directors’ Fee Shares15,800,000 fully paid ordinary shares in the Company issued to existing and former directors
of the Company at an issue price of $0.025 to repay $395,000 of accrued and unpaid
directors’ fees.
Earn-in SharesUp to 1,399,993,000 fully paid ordinary shares in the Company issued to certain Vendors at
an issue price of not less than $0.025 in relation to the BCL Purchase Price.
E ATExponentially accelerating technologies
Excalibur Shares30,720,000 fully paid ordinary shares in the Company issued to Excalibur at an issue price
of $0.025 per share in order to capitalise $768,000 of the indebtedness owing by the
Company to Excalibur.
ExcaliburExcalibur Capital Partners Limited
FMC RegulationsFinancial Markets Conduct Regulations 2014
FMCAFinancial Markets Conduct Act 2013
LISTING PROFILE80
Listing RulesNZX Listing Rules
OptionsOptions to acquire up to a maximum of 132,000,000 fully paid ordinary shares in the Com-
pany for not less than $0.025 per share issued to non-executive directors, senior executives,
and current and future employees of Being AI Group.
RestructureThe proposed operational and capital restructure by the Company negotiated and endorsed
by the Board relating to the conditional acquisition of the Being AI Group.
Reverse Listing or
Reverse Listing Transaction
The acquisition by the Company of 100% of the Being AI Group for the consideration of the
issue of 1,800,000,000 Shares to the Vendors, together with the potential to increase the
consideration by the issue of a further 1,399,992,000 Shares, subject to the achievement of
certain share price milestones for the ACE Shares post completion of the Reverse Listing.
Send Global or SGLSend Global Limited (including its wholly owned subsidiaries, Filecorp NZ Limited and
New Zealand Mail Limited).
ShareholdersShareholders of the Company
Shares and ACE SharesFully paid ordinary shares of the Company
Te Turanga UkaipoTe Turanga Ukaipo Charitable Trust
Vendors2061 LP
2384 LP
2061 LP or 20612061 Limited Partnership
2384 LP or 23842384 Limited Partnership
---
Annual Report
For the year ended 31 March 2023
G3 GROUP LIMITED AND SUBSIDIARIES
Page | - 2 -
Contents
Directors’ Report .......................................................................................................................................... 3
Consolidated Statement of Comprehensive Income .................................................................................. 4
Consolidated Statement of Changes in Equity ........................................................................................... 5
Consolidated Statement of Financial Position ............................................................................................ 6
Consolidated Statement of Cash Flows ....................................................................................................... 7
Notes to the Consolidated Financial Statements ......................................................................................... 8
Company Directory ................................................................................................................................... 33
Independent Auditors Report .................................................................................................................... 34
G3 GROUP LIMITED AND SUBSIDIARIES
Page | - 3 -
Directors’ report
Attached are the audited consolidated financial statements of G3 Group Limited and its subsidiaries for the
year ended 31 March 2023. Section 211 of the Companies Act 1993 specifies the contents of a company’s
annual report. Subsection 3 of Section 211 allows companies to opt out of certain requirements of Section
211 and the Shareholder for G3 Group has chosen to do that.
Significant events during the year:
New customer acquisitions continue to demonstrate the value we bring to the market and growth in our
courier and logistics businesses.
The 2023 financial year was a year of change that saw the continuation of a softening in demand in core
product lines of the business. The Group’s performance was solid, with an operating profit of $2.3 million.
That was $361 thousand behind the 2022 financial year, with the decline caused by several one off and
timing issues.
In October 2022 the Group sold its property and buildings at 14 Honan Place Avondale and has leased
them back from the new owner. The sale generated a $1.1m gain on the original purchase cost.
Liquidity:
The 31 March 2023 Consolidated Statement of Financial Position shows Trade and other payables
exceeding liquid assets (Receivables and Cash) by $4.5 million. This large variance arose because of an
early purchase of inventory in March to help optimise the 2024 Financial Year’s profitability and was funded
by a $5.3 million ANZ bank loan organised in January 2023 that was drawn down in April 2023. $4.8 million
of that loan had been repaid by the end of October 2023.
G3 Group Limited is a New Zealand Limited Company, incorporated 8 October 2008.
For and on behalf of the board
Evan Christian
Paul Forno
Date Date
06/12/2023
G3 GROUP LIMITED AND SUBSIDIARIES
The above statements should be read in conjunction with the notes to and forming part of the consolidated financial
statements
Page | 4
Consolidated Statement of Comprehensive Income
For the Year Ended 31 March 2023
20232022
(Unaudited)
Note$’000$’000
Revenue141,84336,943
Cost of Sales2(35,944)(31,102)
Gross Profit5,8995,841
Other operating income6487
Operating expenses2(3,610)(3,214)
Profit from operations2,3532,714
Finance income3783
Finance expense3(488)(362)
Gain on disposal of assets1,132-
Subvention payment(2,644)-
Profit before income tax4312,355
Income tax expense4(150)(131)
Profit for the year after taxation2812,224
Total comprehensive income for the year2812,224
G3 GROUP LIMITED AND SUBSIDIARIES
The above statements should be read in conjunction with the notes to and forming part of the consolidated financial
statements
Page | 5
Consolidated Statement of Changes in Equity
For the Year Ended 31 March 2023
Share
capital
Retained
earnings Total equity
$'000 $'000 $'000
Balance at 1 April 2021 (unaudited)3,9431,0394,982
Total comprehensive income for the
year
Profit for the year (unaudited)- 2,2242,224
Transactions with owners of the
company in their capacity as owners
Dividends Paid (unaudited)- (538)(538)
Total transactions with owners of the
company in their capacity as owners
(unaudited)
- (538)(538)
Balance at 31 March 2022 (unaudited)3,9432,7256,668
Share
capital
Retained
earnings Total equity
Note $'000 $'000 $'000
Balance at 1 April 2022 (unaudited)3,9432,7256,668
Total comprehensive income for the
year
Profit for the year- 281281
Balance at 31 March 20233,9433,0066,949
G3 GROUP LIMITED AND SUBSIDIARIES
The above statements should be read in conjunction with the notes to and forming part of the consolidated financial
statements
Page | 6
Consolidated Statement of Financial Position
As at 31 March 2023
20232022
(Unaudited)
Note$’000$’000
ASSETS
Non-current assets
Property, plant and equipment9212 5,118
Intangible assets106,297 6,625
Right-of-use assets151,458 -
Deferred tax asset4226 134
Total non-current assets 8,193 11,877
Current assets
Inventories66,286 7,150
Receivables and prepayments 75,441 5,768
Cash and cash equivalents83,133 1,463
Taxation receivable4102 98
Total current assets 14,962 14,479
Total assets 23,155 26,356
EQUITY
Share capital53,943 3,943
Retained earnings3,006 2,725
Total equity
6,949 6,668
LIABILITIES
Non-current liabilities
Interest-bearing loans and borrowings14- 700
Lease Liabilities151,250 -
Other payables
14- 66
Total non-current liabilities1,250 766
Current liabilities
Trade and other payables1213,034 11,683
Employee benefits 13382 383
Interest-bearing loans and borrowings141,309 6,856
Lease Liabilities15231 -
Total current liabilities14,956 18,922
Total liabilities 16,206 19,688
Total equity and liabilities 23,155 26,356
G3 GROUP LIMITED AND SUBSIDIARIES
The above statements should be read in conjunction with the notes to and forming part of the consolidated financial
statements
Page | 7
Consolidated Statement of Cash Flows
For the Year Ended 31 March 2023
20232022
(Unaudited)
Note$’000$’000
Cash flows from operating activities
Cash receipts from customers41,71236,147
Cash paid to suppliers and employees(36,270)(33,561)
Income taxes paid(243)(513)
Net cash inflow from operating activities185,1992,073
Cash flows from investing activities
Purchase of property, plant and equipment(29)(237)
Sale of property, plant and equipment5,973-
Purchase of other intangibles- (1,526)
Interest received773
Net cash inflow / (outflow) from investing activities6,021(1,760)
Cash flows from financing activities
Drawdown of Borrowings
4,0003,500
Repayment of borrowings
(12,957)(4,633)
Interest paid(433)(358)
Interest paid on lease liabilities(50)-
Principal repayment of lease liabilities(110)-
Net cash outflow from financing activities(9,550)(1,491)
Net increase/(decrease) in cash and cash equivalents1,670(1,178)
Cash and cash equivalents at beginning of year1,4632,641
Cash and cash equivalents at end of year83,133 1,463
G3 GROUP LIMITED AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the Year Ended 31 March 2023
Page | 8
Reporting Entity
Financial Statements for G3 Group Limited, (the “Company”) and its subsidiaries, together referred to as
the “Group” are presented. All entities within the Group are companies incorporated and domiciled in New
Zealand, registered under the Companies Act 1993. These consolidated financial statements of the Group
have been prepared in accordance with the Companies Act 1993 and the Financial Reporting Act 2013.
The Group is designated as a for-profit entity for financial reporting purposes.
The Group is primarily involved in providing:
Domestic Courier and Freight
Unified logistics Domestic and International
Business Mail services, both domestic and International (Full rate mail and Bulk mail)
Filing solutions and consumables
Mailhouse services
Over Printing (inhouse and offset)
Mailroom management
Pickup and delivery services – ad hoc, on demand, scheduled.
Consultancy services both mail and filing
These financial statements were authorised for issue by the Board of Directors on 2023.
Basis of Preparation
These financial statements have been prepared in accordance with NZ IFRS RDR. The Group is a Tier 2
for-profit entity and has elected to report in accordance with NZ IFRS RDR as issued by the New Zealand
External Reporting Board (XRB). The Group is eligible to report in accordance with NZ IFRS RDR on the
basis that is does not have public accountability and is not a large for-profit public sector entity. In applying
NZ IFRS RDR, the Group has applied a number of disclosure concessions.
Changes in accounting policies
The accounting policies adopted are consistent with those of the previous year. No new standards and
amendments to standards were applied during the current reporting period that had a material impact on
the Group.
Basis of consolidation
(i) Business combinations
Business combinations are accounted for using the acquisition method as at the acquisition date, which is
the date on which control is transferred to the Group. In assessing control, the Group takes into
consideration potential voting rights that currently are exercisable. The Group measures goodwill at the
acquisition date as:
The fair value of consideration transferred; plus
The recognised amount of any non-controlling interests in the acquiree; plus
If the business combination is achieved in stages, the fair value of the pre-existing equity interest in
the acquiree; less
The net recognised amount (generally fair value) of the identifiable assets acquired and liabilities
assumed.
6 December
G3 GROUP LIMITED AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the Year Ended 31 March 2023
Page | 9
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
Consideration transferred does not include amounts related to the settlement of pre-existing relationships.
Such amounts generally are recognised in profit or loss.
Transaction costs, other than those associated with the issue of debt or equity securities, that the Group
incurs in connection with a business combination, are expensed as incurred.
Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent
consideration is classified as equity, then it is not remeasured, and settlement is accounted for within equ
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