/NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S.
NEWSWIRE SERVICES./
VANCOUVER, BC,
Feb. 24, 2022 /CNW/ -
ECC Ventures 5 Corp. (the "Company" or "ECC5")
(TSXV: ECCV.P) is pleased to announce that it has entered into a
binding letter of intent (the "LOI") dated effective
February 24, 2022, outlining the
general terms and conditions with respect to a proposed acquisition
(the "Acquisition") by ECC5 of all the issued and
outstanding share capital of Shelfie-Tech Ltd.
("Shelfie").
The Acquisition of Shelfie will constitute a reverse takeover
and ECC5's Qualifying Transaction under Policy 2.4 of the TSX
Venture Exchange (the "Exchange"). Assuming completion
of the Acquisition, it is anticipated that ECC5 will graduate to
Tier 2 of the Exchange as a technology issuer.
Shelfie is a private company incorporated in November 2021 pursuant to the laws of
Israel. As of December 31, 2021
(unaudited), Shelfie had assets of US$1,153,385, a working capital position of
approximately US$1,108,000, and had
incurred a net loss of US$665,000,
including research and development costs of US$645,000, Research and development of Shelfie's
product has been ongoing since 2018. As commercial sales of
Shelfie's product has not yet commenced, Shelfie had $nil revenue
during the period.
Shelfie's principal activities have been the development of an
artificial intelligence ("AI") powered real time shelf inventory
analytics robotic platform. Shelfie's innovative solution consists
of a digital image capturing system and a centralized management
system that provides real-time visibility into the retail shelf
supply, pinpointing the exact products running low on inventory,
allowing for rapid remediation and an enhanced customer
experience.
For more information regarding Shelfie, please visit its website
at www.shelfietech.com. Additional financial information relating
to Shelfie will be released when available.
Terms of the Acquisition
Shelfie currently has 16,497 common shares (the "Shelfie
Shares") outstanding, and no convertible securities or
shareholders loans outstanding. Bentsur Joseph, founder and
CEO of Shelfie, owns 10,000 (60.62%) Shelfie Shares.
Under the terms of the Acquisition, ECC5 will complete a
consolidation of its share capital on a 1.5 for 1 basis (the
"Consolidation"), and holders of Shelfie Shares will be
issued an aggregate of 87,338,348 post Consolidation common shares
of ECC5 (the "Consideration Shares"), at a deemed price of
$0.42 per share, in exchange for all
Shelfie Shares. Certain of the Consideration Shares will be
subject to escrow and resale restrictions pursuant to the policies
of the Exchange.
The Company will also issue 150,000 post Consolidation common
shares to The Hayde Family Revocable Trust (the "Hayde
Trust"), a trust controlled by William
Hayde, in connection with the Acquisition, at a deemed price
of $0.42 per share. The Hayde
Trust and William Hayde are not
non-arm's length parties to the Company or Shelfie. The
payment of the finder's fee remains subject to Exchange
acceptance.
Following completion of the Acquisition, it is anticipated that
there will be 91,255,015 post Consolidation common shares issued
and outstanding in the Resulting Issuer (defined below) (excluding
securities issued pursuant to the QT Financing defined and
described below), of which shareholders of Shelfie will own
87,338,348 (95.7%) and shareholders of ECC5 will own 3,766,667
(4.1%). Convertible securities outstanding in ECC5 will be
subject to the Consolidation, resulting in 133,333 agent's options
being exercisable at $0.15 per share
until June 14, 2026, and 376,667
stock options being exercisable at $0.15 until the date that is ninety days after
closing of the Acquisition, subject to the provisions of the
Company's stock option plan. It is also anticipated that ECC5
will change its name to Shelfie-Tech Ltd. in connection with
completion of the Acquisition.
Financing
As a condition to completing the Acquisition, the parties intend
to complete a non-brokered private placement financing (the "QT
Financing") of subscription receipts of Shelfie (the
"Subscription Receipts"), to raise a minimum of US$2,000,000 (≈$CAD2,565,220), through the
issuance of a minimum of 6,107,668 Subscription Receipts at a price
of $0.42 per Subscription Receipt,
which may include the issuance of warrants.
The proceeds of the QT Financing will be held in escrow, pending
the Company receiving all applicable regulatory approvals, and
completing all matters and conditions relating to the Acquisition,
including the Consolidation. Immediately prior to the
completion of the Acquisition, on satisfaction of the escrow
conditions, each Subscription Receipt will automatically be
exchanged, for no further consideration and with no further action
on the part of the holder thereof, to acquire securities of
Shelfie. The Shelfie securities issuable on exercise of the
Subscription Receipts will be exchanged for economically equivalent
securities of the issuer resulting from the Acquisition (the
"Resulting Issuer") in connection with the
Acquisition. The Company may pay a commission in connection
with the QT Financing. Once released from escrow, the
Resulting Issuer will use the proceeds of the QT Financing for
commercialization of the technology platform, and for general
working capital purposes.
All securities issued by the Resulting Issuer in connection with
the QT Financing will be free trading upon completion of the
Acquisition.
Board of Directors and Management Changes
On completion of the proposed Acquisition, the Company's Board
of Directors and management team will be reconstituted to include
four directors and management comprised of individuals from the
current Shelfie team, including the individuals listed below.
Further details of the full management team will be provided in
subsequent press releases.
Bentsur Joseph, CEO, Chairman and Director
Bentsur Joseph is a serial entrepreneur with vast experience
establishing successful companies and expanding them into new
markets and industries. Among other roles, he has served as
Chairman of the international Elad Hotels chain, Director of MARLAZ
Holdings, with a portfolio of publicly traded industrial, real
estate, communications, and hi-tech companies, and as CEO of DIG
Ltd., which produces, and markets electric components sold
throughout Israel. With several
patents to his name, Bentsur Joseph is also currently the CEO and a
director of A2Z Smart Technologies Corp. (TSXV: A2Z, NASDAQ: AZ), a
leading vendor of advanced retail technologies.
Gadi Levin, CFO and
Corporate Secretary
Gadi Levin has extensive
experience in capital markets, and has filled executive positions
and directorships in companies listed on Canadian, USA, and London stock exchanges. His wide-ranging
expertise ranges from finance, treasury, accounting and investor
relations to human resources and information technology.
The Acquisition is not a Non-Arm's Length Qualifying Transaction
under the policies of the Exchange and therefore is not expected to
require approval of ECC5's shareholders. Sponsorship of a
qualifying transaction of a capital pool company is required by the
Exchange unless an exemption from sponsorship requirement is
available. ECC5 intends to apply for a waiver from
sponsorship requirements. However, there is no assurance that
ECC5 will obtain this waiver.
The Acquisition will be completed through a definitive agreement
(the "Definitive Agreement") that is to be negotiated by the
parties, which will contain customary representations and
warranties for similar transactions. It is currently anticipated
that the Acquisition will be completed by way of a plan of
arrangement, pursuant to which a subsidiary of ECC5 will merge with
Shelfie to form the Resulting Issuer.
In connection with the Acquisition and pursuant to the
requirements of the Exchange, ECC5 will file on SEDAR
(www.sedar.com) a filing statement which will contain details
regarding the Acquisition, ECC5, Shelfie, and the Resulting
Issuer.
Completion of the Acquisition is subject to a number of
conditions, including Exchange acceptance, the execution of the
Definitive Agreement, and completion of the QT Financing. Trading
of ECC5's common shares will remain halted pending further filings
with the Exchange.
On Behalf of the Board of Directors
of ECC Ventures 5 Corp.
Doug McFaul
Director
Completion of the Acquisition is subject to a number of
conditions, including, among others, Exchange acceptance and if
applicable pursuant to TSXV Requirements, majority of the
minority shareholder approval. Where applicable, the Acquisition
cannot close until the required approvals are obtained. There can
be no assurance that the Definitive Agreement will be executed or
that the Acquisition will be completed as proposed or at
all.
Investors are cautioned that, except as disclosed in the
disclosure document to be prepared in connection with the
Acquisition, any information released or received with respect to
the Qualifying Transaction, or the Acquisition may not be accurate
or complete and should not be relied upon. Trading in the
securities of ECC5 should be considered highly
speculative.
The TSXV has in no way passed upon
the merits of the proposed Acquisition and has neither approved nor
disapproved the contents of this news release.
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of
the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.
Forward-Looking Statements
Statements included in this announcement, including
statements concerning our and Shelfie's plans,
intentions, and expectations, which are not historical in nature
are intended to be, and are hereby identified as, "forward–looking
statements". Forward-looking statements include, among other
matters, the terms and timing of the Acquisition (including the
entering into of the Definitive Agreement) and the QT Financing,
the growth plans of Shelfie and statements concerning the
Company following the Acquisition, including the composition of the
Company's board of directors and management team. Forward–looking
statements may be, but are not always, identified by words
including "anticipates", "believes", "intends", "estimates",
"expects" and similar expressions. The Company cautions readers
that forward–looking statements, including without limitation those
relating to the Company's and Shelfie's future operations
and business prospects, are subject to certain risks and
uncertainties (including risks that the
Acquisition does not proceed, or proceed on the
expected terms, geopolitical risk, regulatory, Covid-19 and
exchange rate risk) that could cause actual results to differ
materially from those indicated in the forward–looking statements.
There can be no assurance that any forward-looking statement will
prove to be accurate or that management's assumptions underlying
such statements, including assumptions concerning the Acquisition
or future developments, circumstances or results will materialize.
The forward-looking statements included in this news release are
made as of the date of this new release and the Company does not
undertake to update or revise any forward-looking information
included herein, except in accordance with applicable securities
laws.
SOURCE ECC Ventures 5 Corp.