Vancouver, B.C., Canada - TheNewswire – June 28, 2021. Efficacious Elk Capital Corp. ("EECC") (TSXV:EECC.P) provides an update on its proposed arms-length "Qualifying Transaction" involving a business combination (the “Proposed Transaction”) with MiMedia Inc. ("MiMedia"), as announced by News Release dated March 29, 2021.

 

EECC and MiMedia have extended the period of non-binding Letter of Intent entered into between them and dated March 26, 2021 (the "LOI") which was due to expire on May 31, 2021. Under the terms of the amended LOI the parties must enter into a Definitive Agreement by July 31, 2021 and close the Proposed Transaction by October 31, 2021. The amended LOI provides the parties additional time to complete due diligence and to confirm details related to the Proposed Transaction described in the News Release dated March 29, 2021.

 

EECC is also pleased to announce that MiMedia and EECC have engaged Canaccord Genuity Corp. (the "Lead Agent") to act as lead agent and sole bookrunner, on its own behalf and if applicable with a syndicate of agents (collectively, the "Agents") to act on a commercially reasonable best-efforts basis in connection with a brokered private placement of subscription receipts for gross proceeds of up to C$4,000,000 ("Private Placement").

 

Summary of the Proposed Private Placement

 

MiMedia and EECC have entered into an agreement with the Lead Agent pursuant to which the parties intend to complete a private placement offering of subscription receipts of MiMedia (the "Subscription Receipts") at an expected price per Subscription Receipt of C$0.25 (the "Issue Price"), for aggregate gross proceeds of approximately C$4 million, upon terms and conditions to be superseded by a formal agency agreement between MiMedia, EECC and the Agents.

 

Each Subscription Receipt will be convertible into one unit of MiMedia (a “Unit”), with each Unit being comprised of one common share of MiMedia (“Common Shares”) and one half of one Common Share purchase warrant (each whole Common Share purchase warrant, a “Warrant”). At the effective completion of the proposed Qualifying Transaction (as such term is defined in the policies of the TSX Venture Exchange), the MiMedia Common Shares and the MiMedia Warrants acquired upon conversion of each Subscription Receipt will be automatically exchanged for shares (the “Resulting Issuer Share”) and share purchase warrants (the “Resulting Issuer Warrant”) of the resulting issuer on on an economically equivalent basis. Each whole Resulting Issuer Warrant shall be exercisable to acquire one Resulting Issuer Share for a period of 24 months following the date of the satisfaction of Escrow Release Conditions (as defined herein) at an exercise price that is a 30% premium to the Issue Price. The Resulting Issuer may accelerate the expiry date of the Resulting Issuer Warrants in the event that the closing price of Resulting Issuer Shares on the Exchange is greater than 100% of Issue Price for a period of 20 consecutive trading days, by the Company giving notice to the holders of Warrants of the acceleration of the expiry date and, in such case, the Warrants will expire on the 30th day following the date on which such notice is given.

 

 MiMedia intends to use the net proceeds from the Private Placement to support growth and operations, and for general working capital purposes.

 

The Subscription Receipts (and any securities issuable upon exercise thereof) will not be transferable under applicable Canadian securities laws., except pursuant to applicable statutory exemptions, until the date that is four months and a day after the date MiMedia becomes a reporting issuer in any province or territory of Canada (subject to any control person distribution restrictions) in accordance with National Instrument 45-102 – Resale of Securities. Upon completion of the Proposed Transaction and satisfaction of the Escrow Release Conditions, the Resulting Issuer Shares will not be subject to any hold period under applicable Canadian securities laws.

The closing of the Private Placement is expected to occur in July, 2021, at a date to be determined between the Lead Agent and MiMedia (the "Closing Date"). On the Closing Date, the net proceeds from the Private Placement (the "Escrowed Funds") together with fifty percent (50%) of the Cash Commission (as defined herein) shall be placed in escrow with a Canadian trust company (the "Subscription Receipt Agent") mutually and reasonably acceptable to MiMedia and the Lead Agent and invested pursuant to the terms of a subscription receipt agreement (the "Subscription Receipt Agreement"), to be entered into by and among MiMedia, EECC, the Lead Agent (on its own behalf and on behalf of the Agents) and the Subscription Receipt Agent commensurate with industry norms and including customary escrow release conditions in a form and substance reasonably satisfactory to the Lead Agent (the "Escrow Release Conditions").

 

In connection with the Private Placement, the Agents will be paid fees comprised of: (a) a cash fee (the "Cash Commission") equal to 7.0% of the gross proceeds raised from the sale of Subscription Receipts pursuant to the Private Placement; and (b) compensation units (the "Compensation Units") issued by MiMedia equal to 7.0% of the total number of Subscription Receipts issued pursuant to the Private Placement. Each Compensation Unit shall entitle the holder to subscribe for Resulting Issuer Shares and Resulting Issuer Warrants equivalent to one Unit at the Issue Price for a period of 24 months following the Closing Date. Fifty percent (50%) of the Cash Commission and 100% of the Agents’ expenses shall be paid to the Agents on the Closing Date of the Private Placement. The remaining fifty percent (50%) of the Cash Commission will be deposited into escrow on the Closing Date and form part of the Escrowed Funds and shall only be payable upon the satisfaction of the Escrow Release Conditions and the release of the Escrowed Funds. MiMedia has also granted to the Agents an option, exercisable at any time prior to the Closing Date (as hereafter defined), to increase the size of the Private Placement by up to C$1,050,000.

 

Further Information

 

EECC will issue additional news releases related to the Proposed Transaction, the Private Placement and other material information as it becomes available.

 

Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to, execution of a binding definitive agreement relating to the Proposed Transaction and Exchange acceptance. Where applicable, the Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.

 

Investors are cautioned that, except as disclosed in the filing statement to be prepared in connection with the Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

 

The TSX Venture Exchange Inc. has in no way passed upon the merits of the Proposed Transaction and has neither approved nor disapproved the contents of this press release.

        

Forward Looking Information

Statements in this press release regarding EECC's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties, such as terms and completion of the Proposed Transaction. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements.

 

For further information, please contact:

 

David Smalley

Director

Efficacious Elk Capital Corp.

 

Telephone: (604) 684 4535

Email: david@smalleylawcorp.com

 

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 news release.

Not for distribution to U.S. news wire services or for dissemination in the United States