VANCOUVER, BC / ACCESSWIRE / December 3, 2021 / ECC Ventures 3 Corp. ("ECC3" or the "Company") (TSXV:ECCT.P) further to its press release issued on August 3, 2021, the Company is pleased to announce that it has entered into a definitive amalgamation agreement (the "Amalgamation Agreement") dated effective December 2, 2021, pursuant to which it will acquire (the "Acquisition"), through its newly formed subsidiary, all the issued and outstanding share capital of Sparx Technology Inc. ("Sparx"). The Acquisition will constitute a reverse takeover and ECC3's Qualifying Transaction under the policies of the TSX Venture Exchange (the "Exchange"). Upon closing, ECC3 will change its name to Sparx Technology Inc.
Terms of the Acquisition
Sparx currently has 75,343,695 common shares (the "Sparx Shares"), US$250,000 in principal amount of convertible securities (the "Convertible Securities") and $460,000 in shareholder loans outstanding (the "Shareholder Loans"). The Acquisition will be completed by way of an amalgamation pursuant to which, inter alia, (i) ECC3 will complete a forward share split on a 1 for 1.2 basis (the "Share Split"), and (ii) shareholders of Sparx will be issued an aggregate of 52,000,000 post Share Split common shares of ECC3 at a deemed price of $0.25 per share (the "Consideration Shares") as consideration in exchange for their Sparx Shares. In addition, (i) the Convertible Securities will be settled for 1,348,329 post Share Split common shares of ECC3 (ii) $200,000 of Shareholder Loans will be settled for securities of ECC3 on the same terms as the QT Financing; (iii) $200,000 of the Shareholder Loans will be repaid upon or prior to completion of the Acquisition; and (iv) $60,000 of the Shareholder Loans will be converted into long-term debt of ECC3 due 16 months from completion of the Acquisition. Certain of the Consideration Shares will be subject to escrow and resale restrictions pursuant to the policies of the Exchange.
The Company will also issue 1,558,000 post-Share Split common shares of ECC3 to Jane K. Milliken Binns in connection with the Acquisition, at a deemed price of $0.25 per share. The payment of the finder's fee remains subject to Exchange acceptance.
Upon closing of the Acquisition, current securityholders of ECC3 will own 6,780,000 post Share Split common shares, 2,400,000 of which will be subject to escrow provisions pursuant to the policies of the Exchange, and 678,000 stock options will be exercisable at $0.0833 per post Share Split common share until ninety days from closing of the Acquisition, subject to the provisions of the Company's stock option plan, and 240,000 agent warrants will be exercisable at $0.0833 per post Share Split common share until June 14, 2026.
About Sparx
Sparx is a private company incorporated pursuant to the Canadian Business Corporations Act. Sparx is an industry leading interactive media technology company whose principal activities are providing the world's largest and most demanding media companies and sports teams with technologies to engage audiences on any screen, anytime, anywhere. The patented Sparx platform enables broadcasters, streamers, and video producers to engage viewers for longer, generate new revenue opportunities, and create lean-forward experiences for audiences eager to join in the action.
Millions of users can connect to the Sparx platform and interact simultaneously on their mobile phone, tablet, or computer anywhere in the world, in real time.
Current sports client integrations include predictive gaming, trivia, and voting and polling on NESN Sports hockey and baseball broadcasts, and ESPN's College Game Day telecasts. Other sports activations include the Vancouver Canucks "Predict the Play", Fresno State Bulldogs' "The Dog House", plus both "in-app" and "in-venue" experiences with the Orlando Magic's "Magicvision".
Earlier this fall Sparx rolled out its new Video On Demand product inside Disney Now in the U.S. which provides users with an exciting, gamified experience around a Disney Channel movie on demand on desktop, tablet, or mobile device.
Other clients include Turner Sports/Bleacher Report, CNN, NBC, Activision Blizzard plus Endemol Shine and 7 Australia.
The global pandemic has accelerated a shift toward virtual and hybrid events. Over the last year Sparx has developed its Stream Hub product specifically to give content providers and event producers an opportunity to capitalize on this movement by providing tools to gamify and enhance the consumer experience. This development has now pushed Sparx into new verticals including EdTech, corporate conferences and training, virtual charity events and university commencement ceremonies.
The Sparx platform is built to scale and uniquely positioned for expansion throughout international markets as evidenced by recent activations in Australia and South America.
In its fiscal year ended June 30, 2021 (unaudited), Sparx generated revenue of approximately $725,855 and incurred a net loss excluding nonrecurring income and expenses of $1,141,206. As at June 30, 2021 (unaudited), Sparx had approximately $175,290 in total assets and liabilities of approximately $1,360,762.
For more information regarding Sparx, please visit the Company's website at www.sparxtechnology.com.
Financing
As a condition to completing the Acquisition, the parties intend to complete a non-brokered private placement financing (the "QT Financing") of subscription receipts of Sparx (the "Subscription Receipts"), to raise a minimum of $2,400,000, through the issuance of 9,600,000 Subscription Receipts at a price of $0.25 per Subscription Receipt. The proceeds of the QT Financing will be held in escrow, pending the Company receiving all applicable regulatory approvals, and completing all matters and conditions relating to the Acquisition, including the Share Split. Immediately prior to the completion of the Acquisition, on satisfaction of the escrow conditions, each Subscription Receipt will be automatically exercised, for no further consideration and with no further action on the part of the holder thereof, to acquire one unit of Sparx (a "Sparx Unit").
The Sparx Units issuable upon exercise of the Subscription Receipts will be exchanged for one post Share Split common share (a "Resulting Issuer Share") and one half of one common share purchase warrant (each whole warrant, a "Resulting Issuer Warrant") of the issuer resulting from the Acquisition (the "Resulting Issuer"). Each Resulting Issuer Warrant will be exercisable to acquire one Resulting Issuer Share at a price of $0.35 for a period of one year from closing of the Acquisition, provided that the expiry date of the warrants may be accelerated to 30 days, in the event that the Resulting Issuer Shares trade at $0.60 or greater for 10 consecutive trading days. In the event that the Acquisition is not completed, each Subscription Receipt will be cancelled, and the subscription funds will be returned to the subscribers. The Company may pay a commission in connection with the QT Financing. Once released from escrow, the Resulting Issuer will use the proceeds of the QT Financing for marketing initiatives, and for general working capital purposes. It is anticipated that finders' fees of up to 8% in cash and 8% in broker warrants (having the same terms as the Resulting Issuer Warrants), will be payable in connection with the QT Financing.
All securities issued by the Resulting Issuer in connection with the QT Financing will be free trading upon completion of the Acquisition.
ECC3 has agreed to advance to Sparx secured loans in the aggregate amount of $150,000 (the "Bridge Loans"), which shall be used by Sparx for general working capital and operating purposes. An initial $75,000 has been advanced, and up to an additional $75,000 may be advanced upon completion of the QT Financing. In the event that the Amalgamation Agreement is terminated, the advanced amounts will be repayable within thirty (30) days of its termination.
Board of Directors and Management Changes
On completion of the proposed Acquisition, the Company's Board of Directors and management team will be reconstituted to include four directors and management comprised of individuals from the current Sparx team, including the individuals listed below.
Al Thorgeirson, President and CEO
Al Thorgeirson is a seasoned broadcast veteran and builder with nearly 40 years experience in television, radio, and digital broadcasting. Mr. Thorgeirson has worked on the launch of 6 over-the-air television stations, 3 specialty channels, and FM radio stations across Canada. Mr. Thorgeirson also helped develop and launch a voice writing division for Canada's largest closed captioning company. He has operated at the COO, Regional VP and Managing Director levels for Craig Media, CHUM Limited, Rogers Broadcasting and the CBC.
Drew Craig, Director
Drew Craig has been involved in the media and telecommunications industry for over 35 years. He started his career at Craig Media Inc., a third generation television and media business. He held several operational and executive roles at the company, ultimately serving as President and CEO. During his tenure at Craig Media, the company grew from a single TV station to Canada's largest privately held TV broadcast group. During that time Craig Media successfully launched three national specialty channels; MTV, MTV2 and TB Land in partnership with Viacom. Craig Media was sold in 2005 for $265 million. Since the sale of Craig Media, Drew has been an active investor, executive and board member of several media and telecom enterprises. Mr. Craig was a principal investor, Chairman and Co-CEO of Craig Wireless Systems, a company operating and deploying wireless broadband networks in Canada, the USA, Europe, and New Zealand. He also served as Co-Chairman of Peace Arch Entertainment Group Inc., and as a director of Lions Gate Entertainment Corporation.
Drew Craig is currently a founder, principal investor, and Executive Chair of Adtrackmedia. Adtrackmedia is a global digital-out-of-home enterprise operating proprietary, in-tunnel display systems in major subway tunnels on four continents.
Mark Binns, Director
Mark Binns is a seasoned entrepreneur and public markets CEO and Director with more than twenty five years of experience building B2B and B2C companies in the cryptocurrency, retail, and telecom industries. With a focus on building customer-driven sales and marketing strategies, Mr. Binns has completed multiple successful exits and has taken start-ups from 2 people to $500M+ valuations. Mr. Binns also has a successful consulting career providing strategic advice on customer acquisition and revenue growth to Fortune 1000 technology companies including Blackberry, Cisco, and Rogers Communications. Mr. Binns is currently the CEO and Director of BIGG Digital Assets, and a director of DeFi Ventures Inc.
Brian Brady, Director
Brian Brady is the Sole Member of Red Oak Holdings, LLC, an asset management and holding company. Mr. Brady recently stepped down as President and CEO of Northwest Broadcasting after he sold the company to Apollo Global Management. Collectively, Northwest Broadcasting owned and operated 20 television stations in 11 markets in the USA, and was ultimately merged with the radio and television broadcast assets of Cox Media. Mr. Brady remains a Director of Cox Media Group.
Currently, Mr. Brady serves on the board of Syncbak, a privately held technology company that provides geo-filtering and authentication for over-the-top (OTT) television viewing; IZEA Worldwide Inc., a publicly held company providing influencer marketing and custom content services; and Duration Media, LLC, a proprietary digital ad, and impression company. He is also one of three senior advisors for Manhattan West Asset Management, an independent wealth management and high net worth financial advisory firm. Mr. Brady's former board roles include serving as Chairman of the FOX Affiliate Board, a representative body of independent stations affiliated with the Fox Television Network; the National Association of Broadcasting; and Saga Communication, a publicly traded radio and television company.
Richard Hubbard, Director
Richard Hubbard has more than thirty five years of relevant management, corporate finance, and investment banking experience. As a venture capitalist, Mr. Hubbard has worked closely with the leverage buy-out group of Citibank and other venture capital firms. He has originated leveraged buy-outs, management buy-outs, seed stage, venture capital stage and private equity investments, including the acquisition, restructuring and successful sale of a traditional French luxury goods and fashion brand. Mr. Hubbard has also been an early stage investor in a variety of companies in various industry sectors including Gencell Biosystems, an Irish biotech firm that he co-founded in 2011 and subsequently sold to a giant healthcare company. He has also been a director of a number of small to mid-sized companies in Europe, North America, Africa, and Asia.
Spencer Trentini, CFO and Corporate Secretary
Spencer Trentini is a CPA, CA hailing from Vancouver, British Columbia and currently works as an accounting and finance consultant. Before working in the consultancy profession, Mr. Trentini worked at Ernst & Young LLP in their Vancouver office. Mr. Trentini was part of the assurance department from 2012 to 2020 leaving at the rank of Senior Manager. Mr. Trentini has extensive experience in advising public companies and regulated entities on financial reporting matters, corporate finance, and technical accounting. Mr. Trentini received his undergraduate degree from the University of British Columbia - Okanagan and earned his Chartered Accountant designation in 2014.
Kevin Annison, Head of Global Sales
Kevin Annison is a 25+ year senior media executive and entrepreneurial leader serving as a VP/General Manager and President of regional, national & global television and digital media networks (Fox Sports RSN's, Fox Sports SPEED, SPEED2, Fox Sports 1 & Motorsport TV Network) launching and overseeing linear, digital and OTT broadcast platforms. Having operated at the intersection of sports, media, and technology for more than 15 years, and armed with operational experience in corporate and "start-up" media companies, Kevin is recognized as one of the industry's leading experts in redefining both the fan viewing experience, sponsorship integrations and the sports and entertainment business model for the digital age.
Jud Lewis-Mahon, Head of Product & User Experience
As Head of Product & User Experience at Sparx, Jud is responsible for product development and deployment of client interactive experiences.
For two decades Jud has worked to bridge new and legacy media in the digital space. He has brought to life high value audience engagement projects for sports, entertainment, and media brands including NFL, NBA, NHL, and MLB teams; ABC Disney, ESPN, NBC Sports, CNN, Fox Sports, Univision, and other media organizations; and entertainment properties such as the Academy Awards, Emmys, and Billboard Music Awards. With experience in media production, digital product development, and marketing, Jud works hard to enable the successful deployment and execution of Sparx clients' cross-platform integrations and audience engagement projects.
Prior to joining Sparx Technology, Jud led digital at Reelz TV Network and earlier managed digital media production for Bell Globemedia and Sympatico-Lycos.
A copy of the Amalgamation Agreement will be filed and accessible under ECC3's profile on SEDAR (www.sedar.com), and in connection with the Acquisition and pursuant to the requirements of the Exchange, ECC3 will also file on SEDAR a filing statement which will contain details regarding the Acquisition, ECC3, Sparx and the Resulting Issuer.
Sponsorship of a qualifying transaction of a capital pool company is required by the Exchange unless an exemption from the sponsorship requirement is available. ECC3 will apply for a waiver from sponsorship requirements. However, there is no assurance that ECC3 will obtain this waiver.
Completion of the Acquisition is subject to a number of conditions, including Exchange acceptance, , and completion of the QT Financing. Trading of ECC3's common shares will remain halted until completion of the proposed Acquisition.
For more information, please contact the Company at 778-331-8505 or email: [email protected]
On Behalf of the Board of Directors of ECC Ventures 3 Corp.
Scott Ackerman
Director
Completion of the Acquisition is subject to a number of conditions, including, among others, Exchange acceptance and if applicable pursuant to TSXV Requirements, majority of the minority shareholder approval. Where applicable, the Acquisition cannot close until the required approvals are obtained. There can be no assurance that the Acquisition will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the disclosure document to be prepared in connection with the Acquisition, any information released or received with respect to the Qualifying Transaction, or the Acquisition may not be accurate or complete and should not be relied upon. Trading in the securities of ECC3 should be considered highly speculative.
The TSXV has in no way passed upon the merits of the proposed Acquisition and has neither approved nor disapproved the contents of this news release.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statements
Statements included in this news release, including statements concerning ECC3 and Sparx's plans, intentions, and expectations, which are not historical in nature, are intended to be, and are hereby identified as, "forward‐looking statements". Forward-looking statements include, among other matters, the terms and timing of the Acquisition and the QT Financing, the growth plans of Sparx and statements concerning the Company following the Acquisition, including the composition of the Company's board of directors and management team. Forward‐looking statements may be, but are not always, identified by words including "anticipates", "believes", "intends", "estimates", "expects" and similar expressions. The Company cautions readers that forward‐looking statements, including without limitation those relating to the Company and Sparx's future operations and business prospects, are subject to certain risks and uncertainties (including risks that the Acquisition does not proceed, or proceed on the expected terms, geopolitical risk, regulatory, Covid-19 and exchange rate risk) that could cause actual results to differ materially from those indicated in the forward‐looking statements. There can be no assurance that any forward-looking statement will prove to be accurate or that management's assumptions underlying such statements, including assumptions concerning the Acquisition or future developments, circumstances or results will materialize. The forward-looking statements included in this news release are made as of the date of this news release and the Company does not undertake to update or revise any forward-looking information included herein, except in accordance with applicable securities laws.
SOURCE: ECC Ventures 3 Corp.