Shine Box Capital Corp. Announces Letter of Intent for Proposed Business Combination with Ciscom Corp.

Calgary, Alberta--(Newsfile Corp. - August 18, 2020) - Shine Box Capital Corp. (TSXV: RENT.P) ("Shine Box") is pleased to announce that it has entered into a letter of intent ("LOI") dated August 13, 2020, to enter into a business combination (the "Transaction") with Ciscom Corp. ("Ciscom"). It is expected that upon completion of the Transaction, the combined entity (the "Resulting Issuer") will meet the listing requirements for a Tier 1 Industrial issuer under the policies of the TSX Venture Exchange (the "TSXV").

General Information on Shine Box

Shine Box was incorporated under the Canada Business Corporations Act and has a head office in Calgary, Alberta. Shine Box is a "Capital Pool Company" under the policies of the TSXV and it is intended that the Transaction will constitute the "Qualifying Transaction" of Shine Box, as such term is defined in TSXV Policy 2.4 - Capital Pool Companies. The common shares of Shine Box ("Shine Box Common Shares") are currently listed on the TSXV and Shine Box is a reporting issuer in the provinces of British Columbia, Alberta and Ontario.

Shine Box currently has 6,000,000 Shine Box Common Shares issued and outstanding and securities exercisable or exchangeable into 900,000 Shine Box Common Shares, being: (i) 600,000 directors and officers options exercisable at a price of $0.10 per Shine Box Common Share (the "Shine Box Stock Options") and (ii) 300,000 broker warrants exercisable at $0.10 per Shine Box Common Share (the "Shine Box Warrants"). It is expected that the directors and officers of Shine Box will exercise the 600,000 Shine Box Stock Options within six months of closing of the Transaction.

General Information on Ciscom

Ciscom was incorporated under the Business Corporations Act (Ontario) in June 2020 and is based in Toronto, Ontario. The company was established by a group of successful business professionals to develop and execute on mutually profitable, win-win, succession scenarios for both investors and owners of existing profitable businesses. Ciscom is focused on acquiring profitable, long-established Small-Medium Enterprises (SMEs) with complementary B2B technologies and possessing propriety competitive commercial advantages for application throughout North America. Further information relating to Ciscom, including the proposed board nominees of Ciscom, will be included in a subsequent press release in connection with the Transaction. The largest shareholder of Ciscom is Drew Reid, a resident of Toronto, Ontario.

Ciscom is in the process of negotiating a definitive purchase agreement for its first acquisition (the "Initial Acquisition"). Details of this transaction will be disclosed fully once the definitive agreement is finalized. It is anticipated that the Initial Acquisition will close contemporaneous with the closing of the Transaction. Ciscom is also in the process of negotiating Letters of Intent to acquire two additional businesses (the "Additional Acquisitions"). More information will be provided as these Letters of Intent are completed.

Terms of the Transaction

The Transaction is expected to be completed by way of a share exchange, amalgamation or other form of business combination determined with input from the legal and tax advisors to each of Shine Box and Ciscom, which will result in Ciscom becoming a wholly-owned subsidiary of Shine Box.

Upon the satisfaction or waiver of the conditions set out in the definitive transaction agreement to be entered into by Shine Box and Ciscom (the "Definitive Agreement"), the following, among other things, will be completed in connection with the Transaction:

  • contemporaneous with the closing of the Transaction, Ciscom will complete the Initial Acquisition and, potentially, the Additional Acquisitions.

  • the holders of common shares of Ciscom ("Ciscom Share"), including any former shareholders of the companies acquired through the Initial and Additional Acquisitions, will receive common shares of the Resulting Issuer in exchange for their Ciscom Shares on the basis of an exchange ratio of one Shine Box common share for every one Ciscom Share issued and outstanding as at the Closing (the "Exchange Ratio");

  • all outstanding warrants and stock options of Ciscom either automatically adjust in accordance with the terms thereof such that following completion of the Transaction, the holders thereof shall acquire the common shares of Shine Box in lieu of the Ciscom Shares adjusted to reflect the Exchange Ratio, with the exercise prices adjusted by the inverse of the Exchange Ratio, or will be replaced with equivalent convertible or exchangeable securities of Shine Box entitling the holders thereof to acquire common shares of Shine Box in lieu of common shares of Ciscom adjusted to reflect the Exchange Ratio, and otherwise bearing the same terms of the securities they replace;

  • the management and board of directors of the Resulting Issuer will be determined by Ciscom and announced in further press releases; and

  • Shine Box will change its name to Ciscom Corp.

The Transaction constitutes an Arm's Length Transaction under the policies of the TSXV.

A more comprehensive news release will be issued by Shine Box disclosing details of the Transaction, including financial information respecting Ciscom and the companies to be acquired pursuant to the Initial and Additional Acquisitions and details of insiders and proposed directors and officers of the Resulting Issuer, once an agreement has been finalized and certain conditions have been met, including:

  • approval of the Transaction by Shine Box's Board of Directors;

  • satisfactory completion of due diligence; and

  • execution of the Definitive Agreement.

Private Placement Financing

In connection with and as a condition to the Transaction, Ciscom intends to complete an equity financing through a non-brokered private placement of Ciscom Shares for minimum gross proceeds of $5,000,000 and maximum proceeds of $10,000,000 (the "Private Placement"). It is expected that the issue price per Ciscom Share will be a minimum of $0.25, determined by Ciscom in the context of the market. The Ciscom Shares will be sold to "accredited investors" and other exempt parties pursuant to exemptions from prospectus requirements under Canadian securities laws.

The Private Placement is intended to be completed prior to or concurrently with closing of the Transaction. The net proceeds of the Private Placement will be used to complete the Initial Acquisition, the Additional Acquisitions, future acquisitions, working capital and general corporate purposes.

Listing

An application will be made to TSXV to list the Resulting Issuer Shares on TSXV subject to all applicable shareholder and regulatory approvals.

Finder's Fee

Subject to approval of the TSXV, a finder's fee in either cash or securities of the Resulting Issuer of up to five percent (5%) of the value of Transaction will be paid to Arcana Inc. (2.5%) and Genco Management Inc. (2.5%).

Conditions of the Transaction

Completion of the Transaction is subject to the satisfaction of customary closing conditions, including: (i) the satisfactory completion of due diligence by each of Shine Box and Ciscom; (ii) receipt of all required approvals and consents relating to the Transaction, including without limitation all approvals of the shareholders of Shine Box and Ciscom, as required by the TSXV and under applicable corporate or securities laws; (iii) completion of the Initial Acquisition; (iv) completion of the Private Placement; and (v) the TSXV's approval for listing the Resulting Issuer Shares.

Sponsorship of Transaction

Sponsorship of a qualifying transaction of a capital pool company is required by the TSXV unless exempt in accordance with the policies of the TSXV. Given the size and nature of the Private Placement, Shine Box will apply for an exemption from the sponsorship requirements pursuant to the policies of the TSXV.

Trading Halt

Trading of the securities of Shine Box will be halted until the completion of the Transaction.

Additional Information

If and when a Definitive Agreement is executed, Shine Box will issue a subsequent press release in accordance with the policies of the TSXV containing details of the Definitive Agreement and additional terms of the Transaction including information relating to sponsorship, summary financial information in respect of Ciscom, and to the extent not contained in this press release, additional information with respect to the Private Placement, history of Ciscom and the proposed directors, officers, and insiders of the Resulting Issuer upon completion of the Transaction.

For further information please contact:
Shine Box Capital Corp.
Dan Forigo
Phone: 403-796-5529
E-mail: danforigo1972@gmail.com

Ciscom Corp
Drew Reid
Phone: 416-825-1517
E-mail: dreid@ciscomcorp.com

All information in this press release relating to Ciscom is the sole responsibility of Ciscom.

Cautionary Note

Completion of the transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable pursuant to TSXV requirements, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

Forward-Looking Statements

This news release contains "forward-looking information" within the meaning of applicable securities laws relating to the proposal to complete the Transaction and associated transactions, including statements regarding the terms and conditions of the Transaction, the Private Placement, the use of proceeds of the Private Placement, and the proposed directors and officers of the Resulting Issuer. The information about Ciscom contained in the press release has not been independently verified by Shine Box. Although Shine Box believes in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because Shine Box can give no assurance that they will prove to be correct. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risks that the parties will not proceed with the Transaction, the Private Placement, the appointment of the proposed directors and officers of the Resulting Issuer and associated transactions, that the ultimate terms of the Transaction, the Private Placement, the appointment of the proposed directors and officers of the Resulting Issuer and associated transactions will differ from those that currently are contemplated, and that the Transaction, the Private Placement, the appointment of the proposed directors and officers of the Resulting Issuer and associated transactions will not be successfully completed for any reason (including the failure to obtain the required approvals or clearances from regulatory authorities). The terms and conditions of the Transaction may change based on Shine Box's due diligence (which is going to be limited as Shine Box intends largely to rely on the due diligence of other parties of the Transaction to contain its costs, among other things) and the receipt of tax, corporate and securities law advice for both Shine Box and Ciscom. The statements in this press release are made as of the date of this release. Shine Box undertakes no obligation to comment on analyses, expectations or statements made by third-parties in respect of Shine Box, Ciscom, their securities, or their respective financial or operating results (as applicable).

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Not for distribution to U.S. Newswire Services or for dissemination in the United States of America. Any failure to comply with this restriction may constitute a violation of U.S. Securities laws.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/62052

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