SpotLite360 IOT Solutions Inc (CSE:LITE) revealed that it has acquired a majority equity interest in E3 Service Group in a cash-and-stock deal.
For the acquisition of its 51% stake in E3, SpotLite360 will pay US$1 million cash and 20 million shares of SpotLite360 stock at C$0.20 each.
On March 3, 2022, the logistics technologies solutions provider first announced that it had struck a definitive binding agreement to acquire E3. Denver and Vancouver-based SpotLite360 has since successfully completed the transaction based on the terms previously outlined in the definitive agreement.
E3 will now operate as a subsidiary of SpotLite360 and all E3 employees will be retained, said the company.
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 with event-driven data to ensure that optimal environmental conditions are maintained for indoor cultivation facilities around the world.
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.
In a statement, SpotLite360 CEO James Greenwell said: "We are thrilled to forge this strategic relationship with the professionals at E3 who share our vision to deliver a sustainable agricultural supply chain.”
He added: “SpotLite360 looks forward to working together with E3 - shoulder to shoulder - to build a supply chain future in the agriculture industry that delivers process efficiency, supports regulatory and compliance mandates, improves product quality and provides the consumer with the proof of ESG claims. Our engineering designs and supply chain platform will drive best in class models for optimal agricultural cultivation."
Transaction details
SpotLite360 said consideration for the acquisition of 51% of E3 will be US$1 million 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 can 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.
The company said E3 has an executed contracts backlog representing gross revenue of more than CA$6 million, which is expected to be fully realized in fiscal year 2022.
Bryson Guyer, founder of E3 added: "We are delighted to join the SpotLite360 family and we look forward to sharing our expanded industry vision and capabilities with our current and future customers. Our combined staff of engineering and technology expertise will create a new data driven cultivation world."
Separately, SpotLite360 has announced the addition of Shawn Phillips as senior vice president of operations. He has had a distinguished 20-plus year career in finance and operations with CFO and CEO roles in several companies. Phillips has been granted around 500,000 stock options in keeping with SpotLite360’s stock option plan. Each Option is exercisable to acquire a common share at the price of $0.15 per share, the closing price of the shares on the Canadian Securities Exchange on March 4, 2022 for a period of ten years from grant.
Meanwhile, SpotLite360 added that Peter Nguyen has resigned as a director on March 10, 2022.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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