SpotLite360 IOT Solutions Inc said it has entered into a binding definitive agreement with E3 Service Group under which it will acquire a majority equity interest in E3.
The transaction is anticipated to close in early March 2022 and is subject to applicable filings with the Canadian Securities Exchange.
SpotLite360 said 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.
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SpotLite360 said the integration of its 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.
"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,” said SpotLite360 CEO James Greenwell in a statement.
“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."
Transaction details
SpotLite360 said consideration for the acquisition will be US$1million cash and 20 million shares of SpotLite360 stock at C$0.20 each. Cash will be paid from the company treasury in two equal amounts, with a US$500,000 payment upon closing and the balance paid on or before the first-year anniversary of the closing. The shares, meanwhile, will be subject to the statutory four-month and one-day statutory hold period and a concurrent 12-month lock-up whereby the initial 25% of the shares will be released on closing with the remaining 75% released in equal tranches on the 6th, 9th, and 12th month from closing.
E3 also has the opportunity to earn up to 3 million warrants to purchase common shares 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 each.
Upon completion of the transaction, E3 will operate as a subsidiary of SpotLite360. The shareholders of E3 who are vending a majority interest in E3 to the company are arm's-length to the company.
Bryson Guyer, founder of E3, 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."
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