Toronto, Ontario–(Newsfile Corp. – September 13, 2021) – Further to the press release issued June 24, 2021 by Aumento Capital VIII Corporation (TSXV: AMU.P) (“Aumento“) and Eddy Smart Home Solutions Inc. (“Eddy“), Aumento and Eddy are pleased to announce that they, together with 2865357 Ontario Inc. (“Subco“), a wholly-owned subsidiary of Aumento, have entered into an amalgamation agreement dated September 13, 2021 (the “Amalgamation Agreement“) pursuant to which Subco will amalgamate with Eddy (the “Amalgamation“) to complete an arm’s length qualifying transaction (the “Transaction“) in accordance with TSX Venture Exchange (“TSXV“) Policy 2.4 Capital Pool Companies (the “CPC Policy“). The Amalgamation is structured as a three-cornered amalgamation and, as a result, the amalgamated corporation will become a wholly-owned subsidiary of Aumento at the time of the completion of the Amalgamation. In connection with the Transaction, Aumento will change its name to “Eddy Smart Home Solutions Inc.” (the “Resulting Issuer“). The Resulting Issuer will be a technology issuer and continue to carry on the business of Eddy. The Amalgamation Agreement will be made available on Aumento’s SEDAR profile at www.sedar.com.
Eddy was incorporated under the laws of the Province of Ontario and has been operating since 2015. Eddy is a Toronto-based award-winning innovative 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.
Select Financial Information for Eddy
The table below sets forth certain selected preliminary unaudited financial information prepared by management for Eddy as at December 31, 2020, the last day of the most recently completed financial year for Eddy:
|Balance Sheet||As at December 31, 2020|
|Property and Equipment||$788,003|
|Shareholders’ Equity (Deficit)||$3,696,502|
The foregoing selective preliminary unaudited financial information was derived from Eddy’s preliminary unaudited financial statements for the year ended December 31, 2020, which are currently subject to audit and as such, the foregoing may be subject to material changes.
In connection with the Transaction, Eddy entered into an engagement letter dated June 23, 2021 (the “Engagement Letter“) with Canaccord Genuity Corp. (the “Lead Agent“), as lead agent and bookrunner in connection with a brokered private placement (the “Private Placement“) of a minimum of 16,666,667 and a maximum of 25,000,000 subscription receipts of Eddy (the “Subscription Receipts“) at a price of $0.60 per Subscription Receipt for aggregate gross proceeds of a minimum of $10,000,000 and a maximum of $15,000,000. Eddy, together with Aumento, propose to enter into an agency agreement with INFOR Financial Inc. (together with the Lead Agent, the “Agents“) and the Lead Agent (the “Agency Agreement“) to be dated on or about September 14, 2021 pursuant to which the Private Placement will be carried out.
Under the terms of the Agency Agreement, Eddy will grant the Agents an option to purchase up to an additional 3,750,000 Subscription Receipts, exercisable in whole or in part, at any time prior to the closing of the Private Placement, on the same terms as the Private Placement, for additional gross proceeds of up to $2,250,000 (the “Agents’ Option“).
Each Subscription Receipt will be automatically converted, without additional consideration or any further action on the part of the holder thereof, into two (2) common shares in the capital of Eddy (each, an “Eddy Common Share“) upon the satisfaction of certain conditions related to the Transaction (the “Escrow Release Conditions“). Pursuant to the terms of the Amalgamation Agreement each Eddy Common Share will be exchanged for common shares in the capital of the Resulting Issuer (the “Resulting Issuer Common Shares“) on the basis of 0.504867 Resulting Issuer Common Shares (the “Exchange Ratio“) for each Eddy Common Share held in accordance with the Amalgamation Agreement.
Pursuant to the terms of the Agency Agreement, Eddy will pay to the Agents: (i) a cash commission equal to 7.0% of the aggregate gross proceeds of the Private Placement, other than in respect of any Subscription Receipts sold to members of a president’s list provided by Eddy (the “President’s List Purchasers“), which commission shall be 3.5% of the gross proceeds from President’s List Purchasers (the “Agents’ Commission“); and (ii) such number of warrants (the “Agents’ Warrants“) as is equal to 7.0% of the number of Subscription Receipts sold pursuant to the Private Placement, other than any Subscription Receipts sold to President’s List Purchasers, which commission shall be 3.5% of the number of Subscription Receipts sold to the President’s List Purchasers. Each Agents’ Warrant shall be exercisable for two Eddy Common Shares at a price of $0.60 until the date that is 36 months from the date of satisfaction or waiver, as applicable, of the Escrow Release Conditions.
The net proceeds from Private Placement will be used for the purchase of hardware, sales and marketing and for general working capital.
About the Transaction
Under the terms of the Amalgamation Agreement, at the effective time of the Amalgamation (the “Effective Time“), among other things, each holder of Eddy Common Shares shall exchange their Eddy Common Shares for Resulting Issuer Common Shares on the basis of the Exchange Ratio, at a deemed price of $0.60 per Resulting Issuer Common Share. As of the date hereof, there are currently 61,169,428 Eddy Common Shares outstanding. Immediately prior to the completion of the Transaction, an aggregate of 12,594,569 Class B preferred shares in the capital of Eddy (the “Eddy Class B Shares“) will convert into Eddy Common Shares on a one for one basis. Further, convertible debt in the capital of Eddy in the aggregate amount of $2,500,000 (the “Eddy Convertible Debt“) will convert into an aggregate of 10,416,665 Eddy Common Shares. As a result of such conversions and the conversion of the Subscription Receipts described above (assuming the maximum gross proceeds are raised under the Private Placement, no exercise of the Agents’ Option, an all-cash Agents’ Commission and no President’s List Purchasers), Eddy is anticipated to have 134,180,662 Eddy Common Shares outstanding immediately prior to the completion of the Transaction.
In addition: (i) each option to purchase common shares in the capital of Eddy (an “Eddy Option“) outstanding at the Effective Time will be exchanged for a number of options to purchase common shares in the capital of the Resulting Issuer, calculated on the basis of the Exchange Ratio; (ii) each warrant of Eddy (an “Eddy Warrant“) outstanding at the Effective Time will be exchanged for a number of warrants of the Resulting Issuer, calculated on the basis of the Exchange Ratio; and (iii) each Agents’ Warrant outstanding at the Effective Time will be exchanged for a number of agents’ warrants of the Resulting Issuer calculated on the basis of the Exchange Ratio. In each case, corresponding changes to the applicable exercise price will also be made.
Immediately following the completion of the Transaction on a non-diluted basis, the current shareholders of Aumento will own 2,000,000 Resulting Issuer Common Shares (anticipated to be approximately 3%) and the holders of Eddy Common Shares existing immediately prior to the Transaction (including any Eddy Common Shares issued upon the conversion of the Subscription Receipts, the Eddy Class B Shares and the Eddy Convertible Debt) are anticipated to own approximately 67,743,388 Resulting Issuer Common Shares (anticipated to be approximately 97%), assuming the maximum gross proceeds are raised under the Private Placement, no exercise of the Agents’ Option, an all-cash Agents’ Commission and no President’s List Purchasers.
The completion of the Amalgamation is subject to the approval of shareholders of Eddy holding at least 66 2/3% of the issued and outstanding Eddy voting securities. Eddy intends to hold a special meeting of its shareholders (the “Eddy Meeting“) to approve the Amalgamation prior to year-end.
Although the Transaction is not subject to the approval of the shareholders of Aumento, Aumento will hold a special meeting of its shareholders (the “Aumento Meeting“) prior to year-end to approve certain matters related to the Transaction, including:
fixing the number of directors to be elected at six (6);
electing directors of Aumento for the ensuing year;
a change in the name of Aumento from “Aumento Capital VIII Corporation” to “Eddy Smart Home Solutions Inc.” (the “Name Change“);
the adoption of a stock option plan of the Resulting Issuer; and
the adoption of an advance notice bylaw.
The Amalgamation will be approved by the sole shareholder of Subco by way of a resolution.
Additional details regarding the Transaction, the Aumento Meeting and the Eddy Meeting will be available in a joint management information circular of Eddy and Aumento that will be delivered to shareholders of Aumento and shareholders of Eddy in advance of the Aumento Meeting and the Eddy Meeting.
The completion of the Amalgamation is conditional on obtaining all necessary regulatory and shareholder approvals in connection with the matters described above and other conditions customary for a transaction of this type, including but not limited to the approval of the TSXV, the completion of the Private Placement, the approval of the Amalgamation by the shareholders of Eddy and the approval of the Name Change by the shareholders of Aumento.
Note that all of the foregoing figures in this press release have been calculated based on the following assumptions in connection with the Private Placement: (i) the maximum gross proceeds of $15,000,000 are raised; (ii) the Agents’ Option is not exercised; and (iii) there are no President’s List Purchasers. If the terms of the Private Placement differ from the foregoing, the number of Resulting Issuer Common Shares held by former shareholders of Eddy will differ.
Arm’s Length Transaction
The Transaction was negotiated by parties who are dealing at arm’s length with each other and therefore, in accordance with the policies of the TSXV, is not a Non-Arm’s Length Qualifying Transaction, as that term is defined by the TSXV.
Proposed Management and Board of Directors of the Resulting Issuer
Upon completion of the Transaction, it is anticipated that the persons identified below will serve as directors and officers of the Resulting Issuer.
Travis Allan – Chief Executive Officer and Director
Travis Allan has over 25 years in investment, chief executive officer roles, resource management, project management, and professional services experience with delivery of a diverse variety of business and programs. Prior to Eddy, Travis built a privately held retail services outlet from idea inception, employing more than 400 employees. With his extensive experience and entrepreneurial spirit, Travis has cultivated a passionate and motivated team at Eddy. With the expertise and agility to scale up or down, Travis has transformed the company since day one of his arrival in late 2018.
Boris Baril – Chief Financial Officer
Boris Baril joined Eddy as Chief Financial Officer on June 14, 2021. Prior to Eddy Boris was the Chief Financial Officer at Firm Capital Mortgage Investment Corporation, Vice President, Finance at Crius Energy, where he supported Crius’ $100 million IPO., and Vice President, Finance at Universal Energy, where he supported the growth of the entity to annualized revenues of over $700 million, and Universal’s $143 million IPO. Boris graduated from York University and is a CPA, CA.
Sajid Khan – Chief Operating Officer
Sajid Khan helped launch Eddy and has been in the role of Chief Operating Officer since inception. With more than 20 years of leadership and operational experience in the home services sector, Sajid has held roles such as Chief Operating Officer of Eco Energy Service, Vice President of Operations at both National Home Services and Universal Energy, as well as management positions in Direct Energy. He has extensive experience building and leading installation networks and teams and other operational departments such as call centres, billing, processing, and change management.
Mark Silver – Executive Chairman and Director
Mark Silver has over 35 years of experience in business, real estate and building services. As a focused and successful entrepreneur, he previously cofounded Direct Energy and grew revenues to more than $1.3 Billion before selling in 2000 and has since launched Universal Energy and National Home Services, all with revenues in the billions. Mark launched Eddy in 2014 with the goal to extend smart home service offerings to water protection and expand into other markets – like building and commercial verticals.
Roger Daher – Director
Roger Daher has been a licensed pharmacist for over 30 years and he is currently a practicing owner/partner in seven Ontario Pharmasave pharmacies. From 2010 to 2020, Roger has been a member of the Pharmasave Ontario Board of Directors, as well as a member of the audit committee (current treasurer/secretary and also audit committee chair). Roger has also served and continues to serve on a number public company boards including CPC’s. Roger obtained his Bachelor Science, Pharmacy, from the University of Toronto in 1989.
Chris Gower – Director
Chris Gower started his career in construction on the tools – framing houses, where he grew a deep appreciation for the trades. Prior to his current role as Chief Operating Officer, Buildings at PCL Construction (“PCL“), Chris held positions including construction risk manager, senior project manager, district manager and regional vice president. Throughout his more than 25 years at PCL, he has delivered iconic construction projects across Canada, Australia and the United States. As a member of PCL’s Office of the CEO and board of directors, Chris leads a creative team of solution providers who innovatively address construction challenges. He is responsible for the performance of the organization’s Buildings operations across the globe. Chris initiated and led PCL’s entrance into the solar business, including the pursuit and award of our first project in Australia. He provides leadership over many in-house-developed technologies, including the groundbreaking Job Site Insights®, an IoT Smart construction platform that drives efficiency while increasing safety, productivity and quality.
Gary Goodman – Director
Gary Goodman is a Trustee and Chair of the Audit & Risk committee of Boardwalk Real Estate Investment Trust., a former Chairman of Huntingdon Capital Corp., trustee of Gazit America & Brightpath Early Learning, and is a member of the advisory boards of the Vision Funds. Gary was previously Executive Vice President of Reichmann International where he served as a senior financial executive and trusted advisor to Mr. Paul Reichmann and his affiliated companies & REIT’s for over 30 years. Gary was actively involved as a senior financial executive in Paul Reichmann’s Olympia & York Developments; the acquisition & development of Canary Wharf, the IPO’s of CPL REIT and IPC(US) REIT, where he served as President & CEO. He was a director of Campeau Corporation, Trilon Financial Corporation, Catellus Corporation and Brinco Mining. Gary is a Chartered Accountant (Gold Medalist) and has a Bachelor of Commerce degree from the University of Toronto and is a graduate of the Rothman Directors Program.
George Krieser – Director
George Krieser founded Total Credit Recovery Limited (“TCR”) in 1980 and is the President and Chief Executive Officer. TCR is the largest 100% Canadian-owned and operated collection agency, solely collecting Canadian debt. With over 40 years of experience, George has developed a reputation as a well-respected industry leader and is considered an expert in the field of accounts receivables management and debt collections. In addition, George has gained significant experience in the real estate development and management industry, owning and operating commercial and industrial properties in both Canada and the United States. George previously served as a Director of Universal Energy. He also served as a member of the board of directors of Baycrest Foundation and as a member of the fundraising committee for UJA Federation of Greater Toronto. George is actively involved in many other philanthropic efforts for organizations throughout Canada including SickKids Foundation, CIBC Run for the Cure, and Beit Halochem Canada.
Nadine Evans, Corporate Secretary
With more than 20 years of leadership experience, Nadine Evans joined the Eddy team in April of 2017, and currently leads Marketing, Human Resources, and Investor Relations activities. Prior to joining Eddy, she held leadership positions in insurance, telecom, and energy organizations, and launched a not-for-profit association for marketing professionals in 2014 and served on the boards of the Moving Forward 2015 Foundation, as well as an advisor for Humber Colleges Advertising and Marketing Communications Program. Nadine’s strategic vision has created Eddy’s brand, and propelled the organization forward in the digital, IoT and smart city landscapes.
Sponsorship of a qualifying transaction is required by the TSXV in accordance with the CPC Policy, unless exempt in accordance with applicable TSXV policies. Aumento intends to apply for an exemption from sponsorship requirements; however, there is no assurance that Aumento will obtain this exemption.
Aumento is a capital pool company as defined under the CPC Policy. Aumento was incorporated under the Business Corporations Act (Ontario) on November 20, 2020. The common shares of Aumento are listed for trading on the TSXV under the stock symbol “AUM.P”, which shares were halted for trading on June 21, 2021, pending the announcement of the letter of intent entered into in connection with the Transaction. Aumento has not commenced commercial operations other than to enter into discussions for the purpose of identifying potential acquisitions or interests.
Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance. 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 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 TSXV has in no way passed upon the merits of the Transaction and has neither approved nor disapproved the contents of this press release.
In this press release, all references to “$” are to Canadian dollars.
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This press release does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in the United States or any other jurisdiction.
THE SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”), OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES (AS DEFINED IN REGULATION S UNDER THE U.S. SECURITIES ACT) UNLESS REGISTERED UNDER THE U.S. SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
Notice regarding forward-looking statements:
This press release includes forward-looking statements regarding Aumento, Subco, Eddy, the Resulting Issuer and their respective businesses, which may include, but is not limited to, statements with respect to the Eddy Meeting and the Aumento Meeting, the proposed directors and officers of the Resulting Issuer, the completion of the Transaction and the Private Placement, the terms on which the Transaction and the Private Placement are intended to be completed, the use of the net proceeds from the Private Placement, the anticipated share capital of the Resulting Issuer, the ability to obtain regulatory and shareholder approvals and other factors. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “is expected”, “expects”, “scheduled”, “intends”, “contemplates”, “anticipates”, “believes”, “proposes” or variations (including negative variations) of such words and phrases, or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Such statements are based on the current expectations of the management of each entity. The forward-looking events and circumstances discussed in this release, including completion of the Transaction and the Private Placement may not occur by certain specified dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting the companies, including risks regarding the technology industry, failure to obtain regulatory or shareholder approvals, economic factors, the equity markets generally and risks associated with growth and competition. Although Aumento and Eddy have attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. No forward-looking statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and Aumento and Eddy undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, other than as required by law.
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 United States newswire services or for dissemination in the United States
For further information concerning Aumento Capital VIII Corporation, please contact:
Paul Pathak, Director
For further information concerning Eddy Smart Home Solutions Inc., please contact:
Travis Allan, President, Chief Executive Officer and Director
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/96441