SPARQ Announces Closing of First Tranche of Private Placement and Increase in Size of Private Placement

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Toronto, Ontario--(Newsfile Corp. - June 3, 2024) - SPARQ Systems Inc. (TSXV: SPRQ) (OTCQB: SPRQF) ("SPARQ" or the "Company") is pleased to announce it has completed the first tranche of its brokered private placement (the "Offering") of common shares in the capital of the Company ("Common Shares") previously announced in its press release dated May 6, 2024.

The first tranche was completed on May 31, 2024 and consisted of the issuance of an aggregate of 11,938,746 Common Shares at a price of $0.40 per Common Share for aggregate gross proceeds of $4,775,498. The net proceeds of the Offering are intended to be used for working capital and general corporate purposes.

The Company is also pleased to announce that, due to strong investor demand, it has upsized the total potential size of the Offering from $5.0 million to up to $12.5 million. In addition to the subscriptions closed in the first tranche of the Offering, the Company has received additional firm commitments to purchase up to 18,950,975 Common Shares for aggregate gross proceeds of approximately $7,580,390. The Company expects to close the second tranche of the Offering on or about June 7, 2024.

Praveen Jain, CEO said: "We are very pleased to upsize and close the first tranche of this financing and are grateful for the support from both existing and new investors. This financing will allow SPARQ to continue to advance the rollout of our partnership with Jio Things and to continue evolving and innovating our unique micro-inverter technology."

Pursuant to Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("MI 61-101"), the Offering constituted a "related party transaction" as insiders of the Company subscribed for an aggregate of 3,750,000 Common Shares in the first tranche. The Company is relying on exemptions from the formal valuation and minority approval requirements of MI 61-101. The Company did not file a material change report more than 21 days before the expected closing of the Offering as the details of the related parties' participation in the Offering had not been settled.

The securities issued in connection with the Offering are subject to a statutory hold period of four months and one day from the date of issuance in accordance with applicable securities legislation.

The securities referred to in this news release have not been, nor will they be, registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), and may not be offered or sold within 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) absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This press release shall not constitute an offer to sell or the solicitation of any offer to buy, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.