TORONTO, May 16, 2023
/CNW/ - E Automotive Inc. d/b/a EINC (TSX: EINC) ("EINC" or
the "Company") is providing an update on its previously
announced voluntarily delisting of its common shares
("Shares") from the Toronto Stock Exchange (the
"TSX"), substantial issuer bid (the "Offer") and
concurrent private placement for up to C$20
million in Shares (the "Private Placement").
Update on Delisting
The Company expects to delist its Shares from the TSX at close
of markets on May 24, 2023, at which
point there will be no public market for holders of the Company's
Shares ("Shareholders") to trade such Shares. The
Company will, however, remain a "reporting issuer" under applicable
Canadian securities laws.
Update on Offer
In considering the voluntary delisting, the Company was mindful
of the effect the delisting will have on its Shareholders' ability
to seek liquidity.
While the Company is hoping all Shareholders will remain as
Shareholders, to help address concerns from those who do not wish
to hold shares of an unlisted company, the Company's board of
directors (the "Board") approved the commencement of the
Offer, pursuant to which the Company has offered to acquire up to
C$7.5 million of Shares at a
price of C$3.50 per Share (the
"Offer Price").
When the Offer was announced, the Company believed that an Offer
of C$7.5 million would be
sufficiently large to enable the Company to take up all Shares
tendered by then-current Shareholders seeking liquidity in advance
of the delisting. The Company continues to hold that belief today.
However, there can be no assurances that the size of the Offer will
be sufficient to provide all Shareholders with liquidity. The Offer
expires May 23, 2023 at 5:00 pm. The final results of the Offer are
expected to be announced the morning of May
24, 2023.
Details of the Offer, including instructions for tendering
Shares and a copy of the formal valuation obtained in connection
with the Offer, were included in a formal offer to purchase and
issuer bid circular, letter of transmittal and notice of guaranteed
delivery (the "Offer Documents"), which were mailed to
Shareholders on April 18, 2023 and
are available without charge on the Company's SEDAR profile page at
www.sedar.com.
Update on Private Placement
To help finance the Offer and provide the Company with
additional working capital, the Company intends to complete a
Private Placement of up to C$20
million of Shares at the Offer Price. Intercap Equity Inc.
("Intercap"), which currently beneficially owns or
exercises control or direction over approximately 72% of the
Company's Shares on a non-diluted basis, has committed to finance
up to the full amount of the Private Placement. The Company is
currently in discussions with directors, management and two other
shareholders about participating in the Private Placement. No other
commitments have been received in respect of the Private Placement,
though the Company currently expects there may be between
C$1 and C$2
million of aggregate demand from these other investors. If
other investors commit to the Private Placement, Intercap's
commitment may be reduced accordingly. Intercap's commitment may
also be reduced if there are less than $7.5
million of Shares tendered to the Offer.
Process Considerations
The Company's decision to effect the delisting, Offer and
Private Placement was a result of extensive deliberations by the
Board.
The Company does not consider the delisting and the Offer to
involve a conflict of interest, as all Shareholders are receiving
equal treatment under the delisting and the Offer. However, the
Board did consider the differential position of Intercap given its
significant Shareholdings. While the Board determined that
Intercap's differential position was mitigated by Intercap's
already controlling interest and the Company's strategic rationale
for the transactions, it nonetheless took steps to ensure that the
delisting, Offer and Private Placement were considered
independently of Intercap.
Specifically, Jason Chapnik (a
director of the Company who beneficially owns, controls or directs,
directly or indirectly, all of the equity interests of Intercap and
serves as Chief Executive Officer of Intercap) and James Merkur (a director of the Company who
serves as President of Intercap) were excluded for portions of each
of the three special Board meetings held in respect of the
delisting, Offer and Private Placement, so that the Company's
remaining directors could meet in camera and deliberate the
material terms of the transactions. Further, all Board approvals
relating to the delisting, Offer and Private Placement were made
with Messrs. Chapnik and Merkur abstaining.
No Solicitation
Neither the Company nor its Board makes any recommendation to
Shareholders as to whether to tender or refrain from tendering any
or all of their Shares to the Offer. This press release is neither
an offer to purchase nor a solicitation of an offer to sell any
Shares. The solicitation of and the offer to purchase Shares by the
Company is being made only pursuant to the Offer Documents.
Shareholders are urged to read the Offer Documents carefully and to
consult their own legal, financial and tax advisors prior to making
any decision with respect to the Offer.
About EINC
EINC's mission is to optimize the online vehicle buying,
selling, and management experience for automotive dealers and
consumers. EINC has a digital platform (the "Platform") that
provides automotive dealerships with access to an online wholesale
auction marketplace where they can purchase or sell vehicles to
other dealers, as well as access innovative software solutions to
support dealers' digital retailing and inventory management. Access
to EINC's Platform is complemented by ancillary service offerings
to assist dealers with supplementary auction-related needs,
including driving consumer traffic to their digital properties and
optimizing other business processes. E Inc.'s digital wholesale
marketplace goes to market under the brand EBlock, and EINC's
digital retail suite of products goes to market under the brand
EDealer.
Cautionary Statement Regarding
Forward-Looking Information
This news release contains forward-looking information that
reflects the current expectations of management about the future
results and opportunities for EINC. Forward-looking statements
generally can be identified by words such as "will", "expects",
"anticipates", "intends", "plans", "believes", "estimates",
"prospects" or similar expressions suggesting future outcomes or
events. More particularly and without limitation, this press
release contains forward-looking statements and information
concerning the Company's proposed voluntary delisting from the TSX,
purchases of Shares made under the Offer and the Private Placement
and the Board's views on the sufficiency of the size of the Offer.
Such forward-looking statements reflect EINC's current beliefs and
are based on information currently available to management, and
there is no assurance that the voluntary delisting will occur, any
Shares will be purchased under the Offer, the Private Placement
will be completed or that the size of the Offer will be sufficient
to provide all Shareholders with liquidity. Although
EINC believes that the expectations and assumptions on which
such forward-looking statements and information are based are
reasonable, undue reliance should not be placed on the
forward-looking statements and information because EINC can
give no assurance that they will prove to be correct. By its
nature, such forward-looking information is subject to various
risks and uncertainties, which could cause the actual results and
expectations to differ materially from the anticipated results or
expectations expressed. Readers are cautioned not to place undue
reliance on this forward-looking information, which is given as of
the date hereof and to not use such forward-looking information for
anything other than its intended purpose. EINC undertakes no
obligation to update publicly or revise any forward-looking
information, whether as a result of new information, future events
or otherwise, except as required by law.
SOURCE E Automotive Inc.