Elephant Hill Completes Qualifying Transaction with Luckbox and Changes Its Name to Real Luck Group Ltd.
Newsfile Corp.
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Calgary, Alberta--(Newsfile Corp. - December 14, 2020) - Elephant Hill Capital Inc. (TSVX: EH.P) (the "Corporation" or "Elephant Hill"), a capital pool company listed on the TSX Venture Exchange (the "Exchange") is pleased to announce that it has successfully completed its previously announced proposed "Qualifying Transaction" on December 11, 2020, as defined by Policy 2.4 of the Exchange with Esports Limited ("Luckbox"), a private company doing business as "Luckbox" (the "Transaction").
As anticipated to be set out in the Final Bulletin of the Exchange, trading in the common shares of the Corporation is expected to commence on the Exchange at the opening of markets on or about Wednesday, December 16, 2020, under the Corporation's new name "Real Luck Group Ltd." and with the stock symbol "LUCK".
The Corporation is a Tier 2 Industrial/Technology Issuer on the Exchange. As a result of the Transaction, the Corporation will carry on the business of Luckbox, as an esports betting company which provides a fully licensed betting platform dedicated to serving the global esports community where fans and customers are able to bet, watch, and chat in a safe environment.
Consolidation, Name Change, Trading
Prior to closing of the Transaction, the Corporation completed a share consolidation, as previously approved by its shareholders and directors, on a 4.2:1 basis and effected the name change to Real Luck Group Ltd.
Qualifying Transaction
Pursuant to a merger agreement (the "Definitive Agreement") dated November 2, 2020 with Luckbox, Elephant Hill acquired all of the issued and outstanding common shares of Luckbox (the "Luckbox Shares"). The Transaction was completed by way of a three-cornered merger under the laws of the Isle of Man and resulted in Luckbox becoming a wholly owned subsidiary of the Corporation. The Transaction does not constitute a Non-Arm's Length Qualifying Transaction and was not subject to shareholder approval under the policies of the Exchange.
As a result of the Qualifying Transaction, an aggregate of 50,287,475 common shares are currently issued and outstanding for the Corporation, and the following convertible securities: (a) 5,799,166 common shares are reserved for issuance pursuant to the exercise of outstanding stock options of the Corporation, and (b) 11,004,601 common shares are reserved for issuance pursuant to the exercise of share purchase warrants, broker warrants and compensation options for a period of 24 months from the completion of the Transaction, with exercise prices ranging from $0.42 to $0.63 per share.
As disclosed in the Filing Statement, a number of common shares are subject to escrow under the rules of the Exchange as well as private contractual escrow. The following is a summary of the common shares subject to escrow as a result of the Transaction as well as the relevant terms:
Number of Shares
Escrow Terms
476,190
Original CPC Escrow - 10% is released upon Bulletin Date; and 15% is releasable on each 6 months thereafter for a period of 36 months.
18,294,812
Exchange Value Escrow - All of the shares are subject to the Exchange Value Escrow whereby 10% is released upon Bulletin Date; and 15% is releasable on each 6 months thereafter for a period of 36 months.
Private Escrow - 11,571,973 shares out of this total are subject to a private escrow wherein 25% is releasable 15 months from Closing Date, 25% is releasable 18 months from Closing, 20% is releasable 24 months from Closing Date. 15% is releasable 30 months from Closing Date and final 15% is releasable 36 months from Closing Date.
Private Escrow - 7,200,000 shares out of this total are subject to a private escrow wherein 25% is releasable 24 months from Closing Date, 25% is releasable 28 months from Closing, 25% is releasable 32 months from Closing Date and the final 25% is releasable 36 months from Closing Date.
10,714,246
Private Escrow - 1/3 releasable 9 months from Closing Date, 1/3 releasable 12 months from Closing Date, 1/3 releasable 15 months from Closing Date.
3,000,000
Private Escrow - 25% is releasable 6 months from Closing Date, 25% is releasable 12 months from Closing, 25% is releasable 18 months from Closing Date and the final 25% is releasable 24 months from Closing Date.
1,801,394
Private Escrow - 25% is releasable 15 months from Closing Date, 25% is releasable 18 months from Closing, 25% is releasable 21 months from Closing Date and the final 25% is releasable 24 months from Closing Date.
Total 34,286,642
Financings
In connection with the Transaction, Luckbox completed a brokered private placement of 10,728,272 subscription receipts and a concurrent non-brokered private placement of 190,476 subscription receipts for aggregate gross proceeds of $4,555,874. The holders of subscription receipts ultimately received shares and share purchase warrants of the Corporation in connection with the Transaction. In addition, Luckbox raised $1,500,000 through the sale of convertible notes that were ultimately converted into shares and share purchase warrants of the Corporation in connection with the Transaction.
Directors and Management
As a result of the Transaction, the board of directors of the Corporation is comprised of the following individuals: Quentin Martin, Ran Kaspi, Michael Stevens, Drew Green, Maruf Raza and Lloyd Melnick. In addition, the following have been appointed as the principal management of the Corporation: Quentin Martin as Chief Executive Officer, Ran Kaspi as Chief Financial Officer and Michael Stevens as Corporate Secretary.
Full details of the Transaction and certain other matters are set out in the filing statement dated November 27, 2020. A copy of the Filing Statement can be found under our SEDAR profile on SEDAR at www.sedar.com.
Investor Relations Arrangements
The Corporation intends to continue with two investor relations arrangements which Luckbox had entered into, namely, an investor relations agreement with Sophic Capital Inc. ("Sophic") and a service agreement with Native Ads Inc. ("Native"). Pursuant to the terms of the agreement with Sophic, Sophic will provide services such as developing an investor communications plan, developing and maintaining the investor presentation, contacting sell-side analysts and firms to increase awareness and discuss coverage, organizing investor roadshows/virtual when required, assisting with press releases to ensure they speak effectively to the capital markets, assisting with the development of conference call script where required, conference call rehearsal and question and answer preparation and any other investor relations activities required. Sophic's principal place of business is Toronto, Ontario. Sophic's principals, collectively, have fifty years of experience with investor relations working with growth technology companies across all stages of development. Sophic will not have direct or indirect ownership or control or direction or a combination of direct and indirect beneficial ownership of and control or direction over the securities of the Corporation other than as disclosed herein. Sophic receives a fee of $8,000 per month for ongoing investor relations services. In addition, Sophic was granted 300,000 options to acquire Luckbox Shares at a price of $0.42 for a period of 3 years, that vest in four equal tranches every quarter over 12 months commencing on the date of the Transaction. The term of the agreement continues until the provision of its services have been completed unless extended upon mutual agreement by the parties in writing. The agreement may be terminated by either party upon providing 30 days prior written notice.
Pursuant to the terms of the agreement with Native, Native will perform strategic digital media services, marketing and data analytics services such as: (i) content development; (ii) web development; (iii) media buying and distribution; and (iv) campaign reporting and optimization. In return for the provision of their services, Native will receive a fee, including advertising costs, for the six-month period starting December 1, 2020 of $250,000. Native will not have direct or indirect ownership or control or direction or a combination of direct and indirect beneficial ownership of and control or direction over the securities of the Corporation.
For further information, please contact:
Real Luck Group Ltd. Quentin Martin, Chief Executive Officer Email: quentin@luckbox.com Phone: (+44) 7498 181 863
NEITHER THE 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.
Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of the Corporation should be considered highly speculative.
This press release is not an offer of securities for sale in the United States. The securities described in this press release have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the U.S. Securities Act of 1933, as amended) absent registration or an exemption from registration. This press release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction where such offer, solicitation, or sale would be unlawful.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the Transaction and has neither approved nor disapproved the contents of this press release.
Cautionary Note Regarding Forward-Looking Statements: This release includes certain statements and information that may constitute forward-looking information within the meaning of applicable Canadian securities laws. All statements in this news release, other than statements of historical facts, including statements regarding private escrow arrangements, future estimates, plans, objectives, timing, assumptions or expectations of future performance, including future developments and the business and operations of the Corporation after the Transaction,are forward-looking statements and contain forward-looking information. Forward-looking statements are based on certain material assumptions and analysis made by the Corporation and the opinions and estimates of management as of the date of this press release. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Corporation to be materially different from those expressed or implied by such forward-looking statements or forward-looking information. Important factors that may cause actual results to vary, include, without limitation, future developments and the business and operations of the Corporation after the Transaction will not be as anticipated by management. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking information. The Corporation does not undertake to update any forward-looking statement, forward-looking information or financial out-look that are incorporated by reference herein, except in accordance with applicable securities laws.
