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VANCOUVER, BC / ACCESSWIRE / December 29, 2021 / ECC Ventures 3 Corp. ("ECC3" or the "Company") (TSXV:ECCT.P) further to its press releases dated August 3, 2021 and December 3, 2021, is pleased to announce that Sparx Technology Inc. ("Sparx") has completed non-brokered private placement financing (the "QT Financing") conducted in connection with the Company's proposed Qualifying Transaction to acquire Sparx (the "Acquisition").
Pursuant to the terms of the QT Financing, Sparx issued 10,196,000 subscription receipts (the "Subscription Receipts") at a price of $0.25per Subscription Receipt for aggregate gross proceeds of $2,549,000. Immediately prior to the completion of the Acquisition, on satisfaction of the Escrow Release Conditions (as defined below), each Subscription Receipt will be automatically exercised, for no further consideration and with no further action on the part of the holder thereof, to acquire one unit of Sparx (a "Sparx Unit"). The Sparx Units issuable upon exercise of the Subscription Receipts will be exchanged for one post Share Split (defined below) common share (a "Resulting Issuer Share") and one half of one common share purchase warrant(each whole warrant, a "Resulting Issuer Warrant") of the issuer resulting from the Acquisition (the "Resulting Issuer") in connection with the closing of the Acquisition. Each Resulting Issuer Warrant will be exercisable to acquire one Resulting Issuer Share at a price of $0.35 per share for a period of one year from closing of the Acquisition, provided that the expiry date of the Resulting Issuer Warrants may be accelerated to 30 days, in the event that the Resulting Issuer Shares trade at $0.60 or greater for 10 consecutive trading days.
The Subscription Receipts were issued pursuant to a subscription receipt agreement dated December 23, 2021 among Sparx, ECC3 and Endeavor Trust Corporation, as subscription receipt agent (the "Subscription Receipt Agreement"). Pursuant to the Subscription Receipt Agreement, the gross proceeds of the QT Financing were deposited in escrow on closing of the QT Financing pending satisfaction of certain conditions (the "Escrow Release Conditions"), including, amongst others: the satisfaction or waiver of each of the conditions precedent to the Acquisition.
All securities issued by the Resulting Issuer in connection with the QT Financing will be free trading upon completion of the Acquisition.
Upon satisfaction of the Escrow Release Conditions, certain finders to the QT Financing will be paid an aggregate finders' fee of $115,200, and shall be issued an aggregate of 460,800finders' warrants, each such finders' warrant to be exchanged for one finders' warrant of the Resulting Issuer (a "Resulting Issuer Finders' Warrant") upon closing of the Acquisition. Each Resulting Issuer Finders' Warrant will be exercisable to acquire one Resulting Issuer Share at an exercise price of $0.35 per share for a period of one year from issuance, subject to adjustment in certain events.
If the Escrow Release Conditions are not met on or before February 28, 2022, the Subscription Receipts will be cancelled, and holders of Subscription Receipts will be returned a cash amount equal to the issue price of the Subscription Receipts.
Once released from escrow, the Resulting Issuer will use the net proceeds of the QT Financing for sales and marketing, and for general working capital purposes.
Completion of the Acquisition is subject to a number of conditions, including: (i) TSX Venture Exchange (the "Exchange" or "TSXV") acceptance; and (ii) completion of the forward split of ECC3's issued and outstanding common shares on the basis of 1.2 for one (the "Share Split"). Trading of ECC3's common shares will remain halted until completion of the proposed Acquisition.
For more information, please contact Scott Ackerman, the CEO, CFO, and a director of the Company, at 778-331-8505 or email: sackerman@emprisecapital.com.
On Behalf of the Board of Directors of ECC Ventures 3 Corp.
Scott Ackerman
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 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 ECC3 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 news release, including statements concerning ECC3 and Sparx'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 and the anticipated use of proceeds from the QT Financing . 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 and Sparx'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 news 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 3 Corp.
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