SPOTLITE360 IOT SOLUTIONS, INC. announces that it has entered into a binding definitive agreement with E3 Service Group (“E3”) dated March 2, 2022 under which SpotLite360 will acquire a majority equity interest in E3. Pursuant to the November 15, 2021 announcement of entering into a non-binding Letter of Intent, the Company conducted due diligence, finalized negotiations and documented the framework of an acquisition transaction. The transaction is anticipated to close in early March 2022 and is subject to applicable filings with the Canadian Securities Exchange.
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E3 has successfully built an award winning design, engineering and implementation practice in the agricultural/cannabis environmental space. With 300 plus engineering projects in 13 states, E3 has supported customers and investors with event driven data to ensure that optimal environmental conditions are maintained for indoor cultivation facilities around the world. As a result, E3 customers experience an increase in production, higher quality products, and greater profitability. The integration of the SpotLite360 supply chain technologies and software with the operational capabilities of E3 will create a broader product portfolio capable of capturing additional event driven environmental and facility information along with proof of sustainability, chain of custody and ESG (environmental, social and governance) data.
James Greenwell, President and CEO of SpotLite360 commented, “Working together, SpotLite360 and E3 will deliver a unique suite of solutions and services to customers to improve operational efficiency, provide unprecedented supply chain transparency, and maximize profitability. Real time information derived from a variety of IoT sensors along with video integration, comprehensive analytics and workflow automation will result in a more collaborative and efficient supply chain. We are excited to announce new product and service innovations that will drive agricultural industry best practices.”
Consideration for the acquisition will be US $1.0 million cash and 20 million shares of SpotLite360 stock (LITE.CN) at CAD $0.20 per share (collectively, the “Consideration Shares“). Cash will be paid from company treasury in two equal amounts, with US$500,000 to paid upon closing of the transaction and the balance paid on or before the one year anniversary of the closing. The Consideration Shares will be subject to the statutory four (4) month and one (1) day statutory hold period and a concurrent 12-month lock-up whereby the initial 25% of the Consideration Shares will be released on closing with the remaining 75% of the Consideration Shares released in equal tranches on the 6th, 9th and 12th month from closing. E3 also has the opportunity to earn up to 3.0 million warrants (each a “Warrant“) to purchase a common share of SpotLite360 upon achieving performance based milestones over the successive 12 months following the closing. Each Warrant is exercisable for a period of 36 months from closing to purchase one additional common share at $0.20 per common share. Upon completion of the transaction, E3 will operate as a subsidiary of SpotLite360 IOT Solutions, Inc. The shareholders of E3 who are vending a majority interest in E3 to the Company are arm’s-length to the Company.
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Bryson Guyer, Founder E3 Service Group added, “We have a vision of creating a national customer-first culture. With our history of cultivation design leadership, our engineering and designs have proven to maximize optimal environmental conditions and operational productivity. The combination of engineering and supply chain technologies will drive sustainability, additional efficiency, much needed transparency and proof of ESG (environmental, social and Governance) claims. We are extremely excited to deliver this suite of capabilities to a rapidly maturing market.”
In connection with the closing of the acquisition, the Company will pay a finder’s fee of 5% of the value of the consideration paid, in common shares at a deemed value of CAD $0.20 per common share to an arm’s length party.
None of the securities issued in connection with the acquisition of the majority interest in E3 will be registered under the United States Securities Act of 1933, as amended (the “1933 Act”), and none of them will be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the 1933 Act. This news release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of the securities in any state where such offer, solicitation, or sale would be unlawful.
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