PowerBand Signs Letter of Intent With CB Auto Group
More than 67 Million U.S. Consumers will have access to DRIVRZ, PowerBand’s Virtual Transaction Platform to buy, lease, sell and trade cars and trucks
VANCOUVER, British Columbia (November 4, 2020) — PowerBand Solutions Inc. (TSXV: PBX) (OTCQB: PWWBF) (Frankfurt: 1ZVA) ("PowerBand", “PBX” or the "Company”) is pleased to announce that it has signed a Letter of Intent to partner with CB Auto Group, Inc. (“CB Auto”) that will give CB Auto’s membership direct access to DRIVRZ, PowerBand’s virtual platform to buy, lease, sell and trade cars and trucks.
Under the proposed agreement, CB Auto’s membership — consisting of more than 67 million people — will be directed to DRIVRZ when they are looking to acquire new or used vehicles. Additionally, PowerBand will be able to market DRIVRZ, along with associated services and products, exclusively to that membership.
“This partnership will put DRIVRZ in front of millions of U.S. consumers, who will be able to buy, lease, sell, trade and finance a car and truck from their smart phone, as easily as buying a product on Amazon,” said PowerBand CEO Kelly Jennings. “This is another important step in the commercialization of DRIVRZ.”
Founded in 2016, CB Auto Group provides union members and their families access to the Union Auto Program, which offers car-buying services, free benefits, fair pricing and protective products, all designed to provide transparency and confidence when they purchase or lease a new or used vehicle.
CB Auto has access to more than 43 million union members and their families in its customer base. There are also more than 24 million “affinity” members from other associations, such as the alumni of Georgia Tech, the University of Tennessee, ADP, Nike and many others, bringing CB Auto’s total consumer base to more than 67 million.
Based on NADA data, union members alone are presently buying over 3.4 million vehicles from franchise dealers nationwide.
CB Auto augmented its automotive program in 2020 by launching the CB Absolute Advantage, which the company describes as “a member benefits program that provides medium to large businesses, alumni groups, affinity groups, and more, with this concierge car-buying service, along with additional savings and benefit options unlike anything in the automotive industry.” DRIVRZ will now be offered in that program.
PowerBand has created DRIVRZ to enable drivers and automotive dealers to easily buy, sell, lease, trade and finance vehicles from a smart phone, tablet or computer, from any location. Using DRIVRZ, consumers and auto dealers will have access to more than 4.5 million new and used vehicles, financing and insurance products, a one-stop virtual hub for automotive retail.
Under the terms of the Letter of Intent, the Company is to acquire 15% of the outstanding securities (the “Shares”) of CB Auto. The cash purchase price for the Shares is USD $5 million. A USD $50,000 down payment is being made in connection with the execution of the Letter of Intent, following which USD $2 million (minus the deposit) of the cash purchase price is to be paid upon closing of the transaction, a second cash payment of USD $1.5 million will be paid on March 31, 2021, and a third and final payment of USD $1.5 million will be paid on June 30, 2021. The Company will also issue 750,000 share purchase warrants (“Warrants”) entitling CB Auto to acquire common shares of the Company. 300,000 of the Warrants have an exercise price of CDN $0.30 and will issued upon closing, 225,000 Warrants will be issued on March 31, 2021, and the final 225,000 Warrants will be issued on June 30, 2021. The exercise price for the second and third tranche of issued warrants will be based on the Company’s market price according to TSX Venture Exchange (“TSXV”) policies at the time of issuance. All of the Warrants will have a term of 36 months from the closing date. Any common shares of the Company issued from the exercise of the Warrants will be subject to a four-month hold period, which will expire on the date that is four months and one day from the date of issuance of the Warrants. The issuance of the Warrants will be subject to the approval of the TSXV. In addition, the Company will be granted an 18 month option to purchase up to an additional 15% of the Shares of CB Auto based on a valuation of CB Auto USD $40 million and dependent on certain other performance criteria as determined in the definitive agreement to be entered into.
About PowerBand Solutions Inc.
PowerBand Solutions Inc., listed on the TSX Venture Exchange and the OTCQB markets, is a fintech provider disrupting the automotive industry. PowerBand’s integrated, cloud-based transaction platform facilitates transactions amongst consumers, dealers, funders and manufacturers (OEMs). It enables them to buy, sell, trade, finance, and lease new and used, electric- and non-electric vehicles, on smart phones or any other online digital devices, from any location. PowerBand’s transaction platform — being trademarked under DRIVRZ — is being made available across North American and global markets.
The completion of the transactions described herein are subject to the negotiating and entering into of definitive legal documentation, and the satisfaction of conditions precedent. There can be no guarantees that the acquisition will be completed.
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this news release.
For further information, please contact:
Richard Goldman, VP Corporate Development
This news release contains forward-looking statements relating to the Company and other statements that are not historical facts. Forward-looking statements are often identified by terms such as "will", "may", "should", "anticipate", "expects" and similar expressions. All statements other than statements of historical fact, included in this release, including, without limitation, statements regarding future plans and objectives of the Company, are forward looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements.
The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company. As a result, we cannot guarantee that any forward-looking statement will materialize, and the reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated.
Forward-looking statements contained in this news release are expressly qualified by this cautionary statement. The forward-looking statements contained in this news release are made as at the date of this news release, and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by Canadian securities law.
This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws, unless an exemption from such registration is available.