Ether Capital Announces Approval of the Proposed Transaction with Purpose, Voting Results of its 2024 Annual and Special Meeting of Shareholders and Business Update

TORONTO--()--Ether Capital Corporation (Cboe CA: ETHC) (“Ether Capital” or the “Corporation”) announced today that, at the annual and special meeting of the holders (the “Shareholders”) of common shares of the Corporation (“Common Shares”) held on June 10, 2024 (the “Meeting”), the Shareholders approved all matters considered at the meeting, including their overwhelming approval of a special resolution (the “Special Resolution”) authorizing and approving the completion of the previously announced strategic transaction involving Ether Capital, Purpose Unlimited Inc. (“Purpose Unlimited”) and Purpose Investments Inc. (“Purpose Investments”) (the “Transaction”) contemplated by the framework agreement dated May 2, 2024 (the “Framework Agreement”).

Subject to completion of other closing conditions, as a result of the Transaction, among other things, (i) Ether Capital will convert into an exchange-traded fund (the “Fund”) structured as a mutual fund corporation that will be managed by Purpose Investments, and (ii) Purpose Unlimited will purchase certain of Ether Capital’s non-Ether assets, including staking infrastructure and intellectual property rights.

Special Resolution in Respect of the Transaction

The completion of the Transaction required the approval of: (i) at least two-thirds of the votes cast at the Meeting in person or by proxy by Shareholders; and (ii) a majority of the votes cast at the Meeting in person or by proxy by Shareholders, excluding the votes of persons whose votes must be excluded in accordance with Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions (“MI 61-101”).

The voting results from the Meeting in respect of the Special Resolution are as follows:

 

For (%)

Against (%)

Shareholders

10,729,440
(99.918%)

8,822 (0.082%)

Shareholders (excluding votes attached to the Common Shares required to be excluded for the purposes of “minority approval” under MI 61-101)

7,849,440
(99.887%)

8,822 (0.112%)

Subject to receipt of the requisite approval of Cboe Canada, and satisfaction or waiver of the other conditions to closing contained in the Framework Agreement, the Transaction is expected to close on or about June 14, 2024.

Election of Directors

The voting results from the Meeting in respect of the election of the Corporation’s directors, to hold office until the next annual meeting of Shareholders (or until their respective successors are appointed or elected), are as follows:

Director

For (%)

Withheld (%)

Som Seif

10,206,762
(95.050%)

531,500 (4.950%)

Boris Wertz

10,384,336
(96.704%)

353,926 (3.296%)

Liam Horne

10,730,962
(99.932%)

7,300 (0.068%)

Colleen McMorrow

10,384,336
(96.704%)

353,926 (3.296%)

Camillo di Prata

9,860,136
(91.822%)

878,126 (8.178%)

In connection with the Transaction, as further described in the Corporation’s management information circular dated May 7, 2024 (the “Circular”), the directors of the Corporation will resign effective upon completion of the Transaction.

At the Meeting, the Shareholders also approved:

  • The re-appointment of Ernst & Young LLP as auditors of the Corporation until the next annual meeting of Shareholders, and the authority of the directors of the Corporation to fix their remuneration; and
  • The ordinary resolution approving the unallocated options under the Corporation’s share option plan and authorizing an amendment to the share option plan to provide for the option of cashless exercise of options.

Comments from the Board

At the Meeting, the Chair of the Board of Directors and interim Chief Executive Officer, Som Seif, thanked the Company’s shareholders for their longstanding support leading up this major milestone. “When the Company was established in 2018 there were few access points to gain exposure to Ethereum in the capital markets and minimal infrastructure to support the creation of a public vehicle for investors to participate in Ether’s long-term opportunity. Ether Capital presented a unique opportunity to bring together best in class experts from the worlds of finance and investment and the Ethereum ecosystem and over the last number of years together we’ve not only built a Company with a treasury exceeding $235 million but have also created much of the infrastructure and intellectual property required to securely hold our Ether and stake it efficiently and responsibly.”

Boris Wertz, Lead Independent Director, said, “I am proud of the entire Ether Capital team and what we have been able to accomplish over the last number of years. While this transaction may be the end of Ether Capital in its current form, we are still so early in the Ethereum journey and are incredibly excited to see how Ethereum develops over the next few years. The new ETF product will continue to allow investors to have an efficient access point to Ethereum and staking”. Mr. Wertz concluded by thanking the entire Ether Capital team past and present for their hard work and dedication

Business Update

The Corporation currently holds 46,433.2245 Ether, valued at approximately $234.5 million based on a price of $5,052 per Ether.

The Corporation currently has 33,096,820 common shares outstanding and expects that all outstanding share options will be accelerated prior to completion of the Transaction, which would result in approximately 34,449,511 common shares of the Corporation being outstanding, subject to change based on the number of options that are exercised, and how many option holders elect for a cashless exercise.

Based on the foregoing estimates and subject to variations, the expected net asset value (“NAV”) per common share at completion of the Transaction is estimated to be approximately $6.90 per common share (unaudited). This is an estimate only and the actual NAV per common share will vary based on changes to the price of Ether and cash holdings which are subject to the finalization of costs relating to the completion of the Transaction.

Forward-Looking Information

This press release contains forward-looking information and statements within the meaning of applicable securities laws (collectively “forward-looking information”). Such forward-looking information, if and when made, may include, without limitation, statements relating, but not limited, to the Corporation’s anticipated NAV at the closing of the Transaction, business operations, plans or expectations with respect to business strategies and the Transaction. Forward-looking information includes all disclosures regarding possible events, conditions or results of operations that are based on assumptions about future economic conditions and courses of action. Forward-looking information may also include, without limitation, any statement relating to future events, conditions or circumstances, including the Transaction, the anticipated number of options to be exercised, and the cash to be held by the Corporation upon completion of the Transaction. More particularly and without restriction, this press release contains forward-looking information regarding the anticipated timing of the completion of the Transaction and the estimated net asset value of each common share at the time of the completion of the Transaction. The Corporation cautions the reader not to place undue reliance upon any such forward-looking information, which speak only as of the date they are made. Often, but not always, forward-looking information can be identified by the use of words or phrases such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “does not anticipate”, “believes”, and similar expressions or statements that certain actions, events or results “may”, “could”, “would”, “should”, “might”, or “will” be taken, occur or be achieved, and may be based on management’s current assumptions and expectations related to the Transaction and all aspects of the Corporation’s business, industry and the global economy.

Information contained in forward-looking information is based upon certain material assumptions that were applied in drawing a conclusion or making a forecast or projection, including management’s perceptions of historical trends, current conditions and expected future developments, as well as other considerations that are believed to be appropriate in the circumstances. Although the Corporation believes that the expectations reflected in the forward- looking information are reasonable, there can be no assurance that such expectations will prove to be correct and the Corporation cannot guarantee future results, levels of activity, performance or achievements.

Forward-looking information is subject to a number of risks and uncertainties, many of which are beyond the control of the Corporation, which could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, the failure of the parties to satisfy the conditions to the completion of the Transaction; significant Transaction costs or unknown liabilities; failure to realize the expected benefits of the Transaction; general economic conditions; changes in legislation; risks relating to the Fund; and other risks and uncertainties.

Failure of the parties to satisfy the conditions to the completion of the Transaction or to complete the Transaction, may result in the Transaction not being completed on the proposed terms, or at all.

In addition, if the Transaction is not completed, there are risks that the announcement of the Transaction and the dedication of substantial resources of the Corporation to the completion of the Transaction could have an impact on its business and strategic relationships (including with future and prospective employees, customers, suppliers and partners), operating results and activities in general, and could have a material adverse effect on its current and future operations, financial condition and prospects.

Consequently, all of the forward-looking information contained herein is qualified by the foregoing cautionary statements, and there can be no guarantee that the results or developments that we anticipate will be realized or, even if substantially realized, that they will have the expected consequences or effects on our business, financial condition or results of operation.

This list is not exhaustive of the factors that may affect any of the forward-looking information of the Corporation. Additional information about the risks and uncertainties of the Corporation’s business and material factors or assumptions on which information contained in forward-looking information is based is provided in the Corporation’s Annual Information Form and MD&A for the year ended December 31, 2023, and about the Transaction is provided in the Circular, each of which are filed with the securities regulatory authorities in Canada and available at www.sedarplus.ca.

Other than as specifically required by applicable Canadian law, statements of forward-looking information speak only as of the date on which they are made and the Corporation undertakes no obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events, or otherwise.

Contacts

Ether Capital
Jillian Friedman, Chief Operating Officer & Interim Chief Financial Officer
jillian@ethcap.co

Purpose Unlimited
Keera Hart, Kaiser & Partners
Keera.hart@kaiserpartners.com

Release Summary

Ether Capital Announces Approval of the Proposed Transaction with Purpose, Voting Results of its 2024 Annual & Special Meeting of Shareholders

Contacts

Ether Capital
Jillian Friedman, Chief Operating Officer & Interim Chief Financial Officer
jillian@ethcap.co

Purpose Unlimited
Keera Hart, Kaiser & Partners
Keera.hart@kaiserpartners.com