RABI:CC - Removal from Official List of ASX

(TheNewswire)

23 March 2022 – TheNewswire - AdRabbit Limited (ASX:RAB) (TSXV:RABI) ( AdRabbit or Company )has today submitted a formal application for the removal of its fullypaid ordinary shares ( Shares ) from the Official List of AustralianSecurities Exchange ( ASX ), under ASX Listing Rule 17.11 ( De-Listing ).

The Company has sought and received in-principle advicefrom ASX that it will agree to the request for removal upon thesatisfaction of certain conditions. The Company intends to satisfyASX’s conditions.

ASX has provided the Company with in-principle adviceregarding an application for the removal of the Company from theOfficial List, which advised that, based solely on the informationprovided, on receipt of an application for the removal of AdRabbitLimited from the Official List of ASX pursuant to Listing Rule 17.11,ASX would be likely to remove the Company from the Official List ofASX, on a date to be decided by ASX, subject to compliance with thefollowing conditions:

1. (a) the request for removal of theCompany from the Official List of ASX is approved by a specialresolution of shareholders of the Company;

2. (b) the notice of meeting seekingshareholder approval for the Company’s removal from the OfficialList of ASX must include:

   1. (i) a timetable of key dates,including the time and date at which the Company will be removed fromASX if that approval is given;

   2. (ii) details that if holders wishto sell their securities on ASX, they will need to do so before theCompany is removed from the Official List and, if they don’t,thereafter they will only be able to sell their securities on marketon the exchange where the Company is to be listed;

   3. (iii) details of the processesthat will exist after the Company is removed from the Official List toallow security holders to dispose of their holdings and how they canaccess those processes; and

   4. (iv) the information prescribed insection 2.11 of ASX Guidance Note 33, to ASX’ssatisfaction,

3. (c) the removal of the Companyfrom the Official List must not take place any earlier than one monthafter security holder approval has been obtained so that securityholders have at least that period to sell their securities on ASXshould they wish to do so;

4. (d) the Company’s securities aresuspended from quotation at least two (2) Business Days before itsproposed delisting date; and

5. (e) the Company releases the fullterms of the ASX decision to the market upon making a formalapplication to ASX for its removal from the Official List ofASX,

(the ASXConfirmation ).

In accordance with paragraph (a) of the ASXConfirmation, the Company will hold an Extraordinary General Meetingon 2 May 2022 ( EGM ) to seek Shareholder approval, as a Special Resolution, toremove the Company from the Official List of ASX.

In accordance with paragraph (b) of the ASXConfirmation, the statements required to be made in the Notice ofMeeting will be set out in the Explanatory Statement.

In accordance with condition (e) of the ASXConfirmation, the Company has released the full terms of the ASXConfirmation at (a)-(e) above.

The Board considers that it is in the best interests ofthe Company and its Shareholders for the Company to be removed fromthe Official List of ASX for the reasons set outherein.

Removal of the Company from the Official List of ASXmay be perceived to have some advantages for Shareholders. Potentialdisadvantages are set out below.

Shareholders who are uncertain as to what action totake should seek guidance from their professional advisers. Inparticular, Shareholders should seek appropriate legal, financial andtax advice about the potential impacts of holding shares in a companythat is not listed on ASX.

Summary of key reasons for seekingremoval from ASX and related advantages

The Board’s keyreasons for seeking removal are as follows:

1. 1. 1.1 Limited Operations in Australia

The Company's corporate headquarters and principalexecutive, research and development, marketing, design, businessdevelopment, finance, IT, and customer support activities are locatedin Israel under the Company's operating subsidiary, AppsVillageIsrael.

In addition, many of the Company's key employees anddirectors and officers are residents of Israel.

1. 1. 1.2 Listing Costs

There are significant costs involved in maintaining adual-listing, including the additional burden of regulatory complianceacross more than one jurisdiction. The Board is of the view that thesecosts are better invested back into the business.

The Board considers that the financial, administrative,and compliance costs of maintaining a dual-listing on TSXV and ASX areno longer justified or in the best interests of shareholders giventhat a number of key benefits associated with being a listed companyand quotation of its securities on a public market are received by theCompany on the TSXV listing alone. Furthermore, the savings arisingfrom delisting could be better directed elsewhere for the benefit ofShareholders.

The Company estimates that its direct costs inremaining listed on ASX, including payment of ASX’s prescribedannual listing fee, registry fees and costs of compliance with otherformal requirements, is approximately US$200,000 per annum. This doesnot include the indirect costs incurred by the Company in maintainingits ASX listing, including the need to devote significant managementtime to listing-related compliance and administrative matters and theretention from time to time of external legal counsel in relation tosuch matters.

1. 1. 1.3 Primary Listing on TSXV

Following the successful completion of the unsecuredconvertible loan financing as announced by the Company on 3 February2022, which was a condition to listing on the TSXV, the Directors nowconsider that it is in the best interests of the Company andShareholders that TSXV be its primary listing and therefore trading onthe ASX is no longer required.

As at the date of this announcement, the Companyconfirms that 56,089,385 fully paid ordinary shares have been moved byshareholders to the co-transfer agent, Odyssey Trust Company, allowingthem to trade on the TSXV. This represents approximately 30% of allvoting shares currently on issue. The Company anticipates that thesenumbers will continue to increase up to and following the date of theExtraordinary General Meeting on 2 May 2022.

1. 1. 1.4 Lack of Australian Investor Interest

Interest from Australian institutional and retailinvestors has over time reduced and maintaining interest from theseinvestors has proved difficult. However, the recent unsecured convertible loan financing undertaken by theCompany was completed on the basis that the investors recognised thebenefits of listing on the TSXV for an “AdTech” business likeAdRabbit.

In addition, the Company has not had local advisers orbrokers engaged for over 12 months and instead is working withadvisers in Canada and Israel.

1. 1. 1.5 Valuation

The Company operates in the “AdTech” sector whichis valued at higher multiples on the TSXV as opposed to the ASX. Ahigher valuation will benefit both the Company andShareholders.

Potential disadvantages of seekingremoval from the official list of ASX

The Board recognises the following potentialdisadvantages of removal from the Official List:

2.1       Shareholders will no longer have the ability to sell their Shares andrealise their investment in the Company via ASX trading

After the Company is removed from the Official List ofASX, as the Shares will no longer be traded on ASX, Shareholders willonly be capable of sale by an on-market transaction on TSXV.

After the Company’s delisting on 2 June 2022,Australian-based Shareholders who wish to sell their Shares will needto make arrangements with a broker that is registered with the TSXV.TSXV publishes a directory of TSX Venture Exchange Members, who canassist security holders in the disposal of their securities. Thisdirectory can be found on its website: https://www.tsx.com/trading/accessing-our-markets/member-firm-directory?l=A .

2.2        Variousrequirements of the ASX Listing Rules will no longer apply

The reduction of obligations associated with a listingon ASX may include relief from some reporting and disclosurerequirements, removal of certain restrictions on the issue of Sharesand certain restrictions on transactions with related parties(although these will still be governed by the Corporations Act),requirements concerning significant changes to the Company’sactivities and relief from requirements to address ASX CorporateGovernance Principles and Recommendations. However, the Company willbe required to comply with the listing requirements of TSXV and applicable securities law requirements of areporting issuer in the applicable provinces of Canada.

The absence of continued restrictions in these areasmay be perceived to be a disadvantage by some Shareholders,particularly minority Shareholders. However, the Company will be an‘unlisted disclosing entity’ if it has more than 100 Shareholders,meaning that it will continue to have continuous disclosureobligations under the Corporations Act.

The Directors believe the removal from the OfficialList of ASX of the Company will not result in any substantialdiminution of the protection for minority shareholders afforded by theCorporations Act,  TSXV policies, and securities law applicable to areporting issuer in the applicable provinces of Canada. Shareholderswill still have the broad protections of the Corporations Act inrelation to related party transactions, takeovers restrictions,financial reporting obligations and holding annual general meetingsand an ability to bring an action under Chapter 2F.1. The Directorswill still be subject to directors’ duties under the CorporationsAct, including to act in good faith in the best interests of theCompany and for a proper purpose.

Consequences of removal from theofficial list of ASX

If Shareholder approval is received at the EGM, theCompany will be able to proceed with the delisting and will be removedfrom the Official List on a date to be decidedby the ASX ( DelistingDate ). The consequences of the delisting are setout below.

The proposed timetable for the removal of the Companyfrom the Official List (and assuming the special resolution is passedby Shareholders at the EGM) is:

*Dates and times are indicative only and subject tochange by the Company or ASX.

The Delisting Date of 2 June 2022 is not earlier thanone month after the date Shareholder approval would be given.

Shares may continue to be traded on ASX up until theSuspension Date, after which trading will be suspended until theDelisting Date. This will give Shareholders who wish to sell theirShares more than 2 months to seek to trade their Shares on ASX to exitthe Company prior to the Delisting Date, if they do not wish to remainShareholders.

Upon the delisting taking effect, Shares in the Companywill no longer be quoted or traded on ASX and Shareholders will onlybe able to sell their Shares via on-market sales on TSXV or off-marketprivate transactions (subject to compliance with the Corporations Act) .

If the Company is removed from the Official List, andwhile the Company continues to have in excess of 100 Shareholders, theCompany will remain subject to the continuous disclosure regime undersection 675 of the Corporations Act. The Company will post therequired information on the Company's profile on the System forElectronic Document Analysis and Retrieval (SEDAR) at www.sedar.com as required byapplicable securities laws in Canada and the policies of the TSXV oron the Company's website: https://ad-rabbit.com/ .

While the Company continues to have in excess of 100Shareholders, the Company will also continue to be subject toobligations to prepare audited annual and half-yearly financialstatements under Part 2M.3 of the Corporations Act (in addition to therequirements under applicable Canadian securities laws, such as therequirement to file quarterly interim financial statements and annualaudited financial statements) and will be required to hold an annualgeneral meeting of shareholders at least once each calendar year andwithin five months after the end of its financial year in accordancewith section 250N of the Corporations Act.

Moreover, Shareholders will continue to receive thebenefit of the protections under:

(a)        Chapter 6 of the Corporations Act (forso long as the Company has 50 Shareholders or more); and

(b)        the related party provisions in Chapter2E of the Corporations Act with respect to any financial benefitsprovided to any related parties by the Company.

An additional consequence of the delisting is that, inCanada, the Company will no longer qualify as a foreign designatedissuer, which means that it will be required to comply with allapplicable Canadian continuous disclosure requirements applicable to areporting issuer in the applicable provinces of Canada.

Shareholder remedies available

The Corporations Act provides for protections andremedies that shareholders may pursue in the event that the De-Listingoccurs and they consider it to have been contrary to the interests ofthe shareholders as a whole or oppressive, unfairly prejudicial ordiscriminatory to a member or members. Further, the Takeovers Panelmay prevent the removal if it considers it to involve “unacceptablecircumstances”. These remedies are described in more detailbelow:

Part 2F.1 Members’ rights andremedies

Sections 232 to 235 of the Corporations Act providethat a court may make a number of orders that can affect the conductof the Company upon application from a shareholder or previousshareholder. The application must allege that the conduct of theCompany is contrary to the interests of the shareholders as a whole oroppressive, unfairly prejudicial or discriminatory to a member ormembers. Should the court determine that the conduct is oppressive, itmay make any order it considers appropriate to remedy or eliminate theoppression.

Relief under these sections is not available merelybecause the shareholder disagrees with the decision of the Company oris dissatisfied with their own position. Oppression in thiscircumstance has been previously considered by courts to connote alack of probity and fair dealing, something that is burdensome, harshor wrongful, or is inequitable or unjust, or exhibits commercialunfairness.

Part 6.10 Division 2 Subdivision B– Unacceptable circumstances

Section 657A of the Corporations Act gives theTakeovers Panel the power to declare circumstances in relation to theaffairs of a company to be unacceptable. Shareholders may make anapplication to the Panel for a declaration of unacceptablecircumstances under section 657C(2)(d) of the Act.

Where circumstances are declared unacceptable, thePanel has broad powers to make orders to correct the unacceptablecircumstances as quickly and as cost effectively as possible.

A recent Takeovers Panel decision has indicated thatthe Panel is willing to consider whether a delisting gives rise tounacceptable circumstances where the process of delisting has or islikely to have an effect on the control or the acquisition of asubstantial interest in a listed company, and appears inconsistentwith the purposes set out in section 602 of the CorporationsAct.

Those purposes are to ensure that conduct with respectto the Company occurs in an efficient, competitive and informedmarket.

What happens Shareholder approval isnot received

If Shareholder approval is not received, unless asubsequent proposed delisting is approved by Shareholders or ASXdetermines that the Company’s securities should no longer be listed,the Shares would remain dual-listed on ASX and TSXV.

-Ends-

This announcement has been approved and authorised forrelease by Max Bluvband, AdRabbit’s Managing Director.

For further information, please contact:

David Hwang

Company Secretary

Ph: +61 433 292 290

Max Bluvband

E: max@appv.io

About AdRabbit Limited (formerly,AppsVillage Australia Limited)

AdRabbit develops an AI-based advertising and marketingplatform for small and medium companies that enables them to runautomated large-scale advertising and marketing campaigns both onlineand on social media, including top-tier networks such as Facebook,Google, and TikTok.

The AdRabbit platform provides the complete advertisingcycle, from ad design and creation, budget and channelrecommendations, analytics, and campaign management, to the leadfunnel.

The AdRabbit platform integrates directly withe-commerce sites such as Shopify and WooCommerce and is accessible asa mobile application on iOS and Android.

TSX Venture Exchange

Neither the Exchange nor itsRegulation Services Provider (as such term is defined in the policiesof the Exchange) accepts responsibility for the adequacy or accuracyof this news release.

Caution Regarding Forward LookingStatements

The information in this news releaseincludes certain information and statements about management’s viewof future events, expectations, plans and prospects that constituteforward looking statements. These statements are based uponassumptions that are subject to significant risks and uncertainties,including those “Risk Factors” contained in the ListingApplication of the Company dated November 15, 2021 and available at www.sedar.com . Forward looking statements in this newsrelease include, but are not limited to, the receipt of shareholderapproval for the proposed delisting, the Company satisfying all of the ASX’sconditions and receipt offinal approval from the ASX for the delisting, completion of thedelisting, the indicative timetable and timing of the delisting steps,and the proposed benefits and anticipated consequences of delisting. .Because of these risks and uncertainties, the actual results,expectations, achievements or performance may differ materially fromthose anticipated and indicated by these forward-looking statements.Although the Company believes that the expectations reflected inforward looking statements are reasonable, it can give no assurancesthat the expectations of any forward-looking statement will prove tobe correct. Except as required by law, the Company disclaims anyintention and assumes no obligation to update or revise anyforward-looking statements to reflect actual results, whether as aresult of new information, future events, changes in assumptions,changes in factors affecting such forward looking statements orotherwise.

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