Meteorite Capital Inc. Announces Termination of Qualifying Transaction and Proposed Adoption of Changes in Accordance with CPC Policy 2.4

Montreal, Quebec--(Newsfile Corp. - February 26, 2021) - Meteorite Capital Inc. (TSXV: MTR.P) ("Meteorite" or the "Company") announces that it will not be proceeding with its proposed business combination with Sparkit Media Inc. ("Sparkit") under the original conditions at this time, and that the letter agreement dated May 18, 2020 between Meteorite and Sparkit, as amended on November 27, 2020, has been terminated, as set out in further detail in a termination agreement dated February 22, 2021.

Meteorite is now also evaluating alternative acquisition opportunities with a view to completing its qualifying transaction ("QT").

Accordingly, the Company intends to implement certain amendments to further align its policies with changes recently announced by the TSX Venture Exchange (the "Exchange") to its Capital Pool Company program and Policy 2.4 - Capital Pool Companies, effective as of January 1, 2021 (the "New CPC Policy").

In line with the requirements of the New CPC Policy, the Company will be seeking shareholder approval at its upcoming annual general and special meeting of shareholders (the "Meeting"), for the following matters: (i) to amend the Company's Stock Option Plan (the "Option Plan") to, among other things, become a "10% rolling" plan prior to the Company completing a QT; (ii) to remove the consequences of failing to complete a QT within 24 months of the Company's date of listing on the Exchange (the "Listing Date"); and (iii) to amend the escrow release conditions and certain other provisions of the Company's Escrow Agreement (the "Escrow Agreement"). These proposed amendments are described in further detail below.

Amendments to the Option Plan

The proposed amendments to the Option Plan will, in relevant part, enable the Company to reserve for issuance as options a total number of common shares of the Company (the "Shares") up to 10% of the Shares issued and outstanding as at the date of grant of such options, rather than 10% of the Shares issued and outstanding as at the date of the Company's initial public offering.

Removal of the Consequences of Failing to Complete a QT within 24 Months of the Listing

Under the prior version of the Exchange's Policy 2.4 - Capital Pool Companies (as at June 14, 2010) (the "Former Policy") certain consequences were triggered in the event of failure to complete a QT within 24 months of the Listing Date. These consequences included a potential for Shares to be delisted or suspended, or, under certain circumstances, the transferring of Shares to be listed on the NEX and cancellation of a portion of the seed shares. Subject to obtaining disinterested shareholder approval, the New CPC Policy has now removed such consequences for existing capital pool companies.

Amendments to the Escrow Agreement

Certain amendments to the Escrow Agreement will also be made possible with shareholder approval under the New CPC Policy, including, notably, allowing the Company's escrowed securities to be subject to an 18-month escrow release schedule as detailed in the New CPC Policy, rather than the current 36-month escrow release schedule in the Former Policy.

Other Changes

Under the New CPC Policy, the Company is permitted to implement certain other changes from the Former Policy without obtaining shareholder approval. Accordingly, the Company wishes to have the option to take advantage of all the changes under the New CPC Policy that do not require shareholder approval, including, but not limited to:

  • increasing the maximum aggregate gross proceeds to the treasury that the Company can raise from the issuance of Shares in the IPO, seed shares and private placement to the new limit of $10,000,000, raised from the previous total of $5,000,000;

  • removing the restriction stipulating that no more than the lesser of 30% of the gross proceeds from the sale of securities issued by the Company and $210,000 may be used for purposes other than identifying and evaluating assets or businesses and obtaining shareholder approval for a proposed QT, and implementing the restrictions on the permitted use of proceeds and prohibited payments under the New CPC Policy, under which reasonable general and administrative expenses not exceeding $3,000 per month are permitted;

  • removing the restriction with respect to issuing new agent's options in connection with a private placement; and

  • removing the restriction with respect to officer positions, such that now one person has the ability to act as the chief executive officer, chief financial officer and corporate secretary of the Company at the same time.

The Company firmly believes that the adoption of the above matters in accordance with the New CPC Policy is in the best interests of Meteorite shareholders, as it will afford the Company greater flexibility in search of the ideal QT and ultimately increase value for all interested parties.

Additional information regarding Meteorite is available on SEDAR at www.sedar.com. The TSX Venture Exchange and its Regulatory Services Provider (as per the meaning assigned to this term in TSX Venture Exchange's policies) bear no liability as to the relevance or accuracy of this press release.

ABOUT METEORITE

Meteorite carries on business as a "Capital Pool Company", as such term is defined in TSX Venture Exchange Policy 2.4 - Capital Pool Companies. Meteorite's principal purpose is the identification, evaluation and acquisition of assets, properties or businesses or participation therein subject, in certain cases, to shareholder approval and acceptance by the TSX Venture Exchange.

For further information, please contact:
Charles Spector
info@meteoritecapital.com
(514) 878-8847

THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES.

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