Aumento Capital VIII and Eddy Smart Home Solutions Enter into a Letter of Intent for Proposed Reverse Takeover Transaction
Toronto, Ontario--(Newsfile Corp. - June 24, 2021) - Aumento Capital VIII Corporation (TSXV: AMU.P) ("Aumento") and Eddy Smart Home Solutions Inc. ("Eddy") are pleased to announce that they have entered into a letter of intent (the "LOI") to complete a business combination transaction (the "Qualifying Transaction") that will result in the reverse take-over of Aumento by Eddy Solutions. The entity resulting from the Qualifying Transaction (the "Resulting Issuer") will continue to carry on the business of Eddy. The LOI was negotiated at arm's length and is dated June 21, 2021.
Eddy is an award-winning innovative North American manufacturer of smart water metering products and related technologies, helping property owners protect, control, and conserve water usage by combining water sensing devices with behavioural learning software. Eddy provides substantial protection to single-family homes as well as commercial and residential buildings at every stage of the building cycle, including construction. For more details on Eddy's products or company information, please visit www.eddysolutions.com. Eddy was established as an Ontario corporation in January 2015.
Aumento is a capital pool company as defined under TSX Venture Exchange ("TSXV" or the "Exchange") Policy 2.4 - Capital Pool Companies. Aumento intends that the Qualifying Transaction will constitute its Qualifying Transaction, as such term is defined in the policies of the Exchange. Aumento was incorporated under the Business Corporations Act (Ontario) on November 20, 2020. The common shares of Aumento (the "Aumento Shares") are listed for trading on the TSXV under the stock symbol "AUM.P." Aumento has not commenced commercial operations other than to enter into discussions for the purpose of identifying potential acquisitions or interests.
Terms of the Qualifying Transaction
The Qualifying 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 Aumento and Eddy, which will result in Eddy becoming a wholly-owned subsidiary of Aumento.
Upon the satisfaction or waiver of the conditions set out in the definitive transaction agreement to be entered into by Aumento and Eddy (the "Definitive Agreement"), the following, among other things, will be completed in connection with the Qualifying Transaction:
a) the holders of all of the issued and outstanding shares in the capital of Eddy (the "Eddy Shares") will receive 42,500,000 common shares of the Resulting Issuer at a deemed issue price of $0.60 per share for aggregate consideration of $25,500,000 in exchange for all of the outstanding Eddy Shares;
b) all outstanding warrants and stock options of Eddy will be replaced with equivalent convertible or exchangeable securities of Aumento entitling the holders thereof to acquire Aumento Shares in lieu of Eddy Shares adjusted to reflect the exchange ratio of Eddy Shares for Aumento Shares (the "Exchange Ratio"), and otherwise bearing the same terms of the securities they replace;
c) all outstanding convertible debentures of Eddy convert into Eddy Shares prior to being exchanged for Aumento Shares at the Exchange Ratio;
d) the name of the Resulting Issuer changed to "Eddy Smart Home Solutions Inc." or such other name as may be chosen by Aumento and Eddy; and
e) the management and board of directors of the Resulting Issuer will be replaced with Travis Allan as a director, President and CEO and Boris Baril as CFO, together with four other nominees of Eddy and one nominee of Aumento to the board of directors.
The Qualifying Transaction constitutes an Arm's Length Transaction under the policies of the TSXV.
A more comprehensive news release will be issued by Aumento disclosing details of the Qualifying Transaction, including financial information respecting Eddy, particulars of an equity financing to be completed by Eddy resulting in gross proceeds of at least $5 million (the "Private Placement") and details of insiders and proposed directors and officers of the Resulting Issuer, once the Definitive Agreement has been finalized and certain conditions have been met, including:
a) approval of the Qualifying Transaction by Aumento's board of directors;
b) satisfactory completion of due diligence; and
c) execution of the Definitive Agreement.
An application will be made to TSXV to list the common shares of the Resulting Issuer on the Exchange subject to all applicable shareholder and regulatory approvals.
No finder's fee shall be payable by either party with respect to the Qualifying Transaction.
Conditions of the Qualifying Transaction
Completion of the Qualifying Transaction is subject to the satisfaction of customary closing conditions, including: (i) the satisfactory completion of due diligence by each of Aumento and Eddy; (ii) receipt of all required approvals and consents relating to the Qualifying Transaction, including without limitation all approvals of the shareholders of Aumento and Eddy, as required by the TSXV and under applicable corporate or securities laws; (iii) completion of the Private Placement; and (iv) the TSXV's approval for listing the common shares of the Resulting Issuer.
Additional Information Regarding the Qualifying Transaction
Further details of the Qualifying Transaction (including business and financial information in respect of Eddy) and the Private Placement will be included in a comprehensive press release and other disclosure documents to be filed by Aumento in connection with the Qualifying Transaction.
To Aumento's knowledge, at the time of entering into the LOI, none of its directors, officers or significant shareholders of Aumento had any direct or indirect interest in, nor any other relationships with, Eddy or its assets.
For further information please contact:
Aumento Capital VIII Corporation
Roger Daher, President
Eddy Smart Home Solutions Inc.
Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange 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.
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.
The statements made in this press release may contain forward-looking statements that may involve a number of risks and uncertainties. Actual events or results could differ materially from the companies' expectations and projections.
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To view the source version of this press release, please visit https://www.newsfilecorp.com/release/88570