E Automotive Inc. d/b/a EINC Provides Update on Voluntary Delisting from Toronto Stock Exchange, Substantial Issuer Bid and Concurrent Private Placement

TORONTO, May 16, 2023 /CNW/ - E Automotive Inc. d/b/a EINC (TSX: EINC) ("EINC" or the "Company") is providing an update on its previously announced voluntarily delisting of its common shares ("Shares") from the Toronto Stock Exchange (the "TSX"), substantial issuer bid (the "Offer") and concurrent private placement for up to C$20 million in Shares (the "Private Placement").                                       

Update on Delisting

The Company expects to delist its Shares from the TSX at close of markets on May 24, 2023, at which point there will be no public market for holders of the Company's Shares ("Shareholders") to trade such Shares. The Company will, however, remain a "reporting issuer" under applicable Canadian securities laws.

Update on Offer

In considering the voluntary delisting, the Company was mindful of the effect the delisting will have on its Shareholders' ability to seek liquidity.

While the Company is hoping all Shareholders will remain as Shareholders, to help address concerns from those who do not wish to hold shares of an unlisted company, the Company's board of directors (the "Board") approved the commencement of the Offer, pursuant to which the Company has offered to acquire up to C$7.5 million of Shares at a price of C$3.50 per Share (the "Offer Price").

When the Offer was announced, the Company believed that an Offer of C$7.5 million would be sufficiently large to enable the Company to take up all Shares tendered by then-current Shareholders seeking liquidity in advance of the delisting. The Company continues to hold that belief today. However, there can be no assurances that the size of the Offer will be sufficient to provide all Shareholders with liquidity. The Offer expires May 23, 2023 at 5:00 pm. The final results of the Offer are expected to be announced the morning of May 24, 2023.

Details of the Offer, including instructions for tendering Shares and a copy of the formal valuation obtained in connection with the Offer, were included in a formal offer to purchase and issuer bid circular, letter of transmittal and notice of guaranteed delivery (the "Offer Documents"), which were mailed to Shareholders on April 18, 2023 and are available without charge on the Company's SEDAR profile page at www.sedar.com.

Update on Private Placement

To help finance the Offer and provide the Company with additional working capital, the Company intends to complete a Private Placement of up to C$20 million of Shares at the Offer Price. Intercap Equity Inc. ("Intercap"), which currently beneficially owns or exercises control or direction over approximately 72% of the Company's Shares on a non-diluted basis, has committed to finance up to the full amount of the Private Placement. The Company is currently in discussions with directors, management and two other shareholders about participating in the Private Placement. No other commitments have been received in respect of the Private Placement, though the Company currently expects there may be between C$1 and C$2 million of aggregate demand from these other investors. If other investors commit to the Private Placement, Intercap's commitment may be reduced accordingly. Intercap's commitment may also be reduced if there are less than $7.5 million of Shares tendered to the Offer.

Process Considerations

The Company's decision to effect the delisting, Offer and Private Placement was a result of extensive deliberations by the Board.

The Company does not consider the delisting and the Offer to involve a conflict of interest, as all Shareholders are receiving equal treatment under the delisting and the Offer. However, the Board did consider the differential position of Intercap given its significant Shareholdings. While the Board determined that Intercap's differential position was mitigated by Intercap's already controlling interest and the Company's strategic rationale for the transactions, it nonetheless took steps to ensure that the delisting, Offer and Private Placement were considered independently of Intercap.

Specifically, Jason Chapnik (a director of the Company who beneficially owns, controls or directs, directly or indirectly, all of the equity interests of Intercap and serves as Chief Executive Officer of Intercap) and James Merkur (a director of the Company who serves as President of Intercap) were excluded for portions of each of the three special Board meetings held in respect of the delisting, Offer and Private Placement, so that the Company's remaining directors could meet in camera and deliberate the material terms of the transactions. Further, all Board approvals relating to the delisting, Offer and Private Placement were made with Messrs. Chapnik and Merkur abstaining.

No Solicitation

Neither the Company nor its Board makes any recommendation to Shareholders as to whether to tender or refrain from tendering any or all of their Shares to the Offer. This press release is neither an offer to purchase nor a solicitation of an offer to sell any Shares. The solicitation of and the offer to purchase Shares by the Company is being made only pursuant to the Offer Documents. Shareholders are urged to read the Offer Documents carefully and to consult their own legal, financial and tax advisors prior to making any decision with respect to the Offer.

About EINC

EINC's mission is to optimize the online vehicle buying, selling, and management experience for automotive dealers and consumers. EINC has a digital platform (the "Platform") that provides automotive dealerships with access to an online wholesale auction marketplace where they can purchase or sell vehicles to other dealers, as well as access innovative software solutions to support dealers' digital retailing and inventory management. Access to EINC's Platform is complemented by ancillary service offerings to assist dealers with supplementary auction-related needs, including driving consumer traffic to their digital properties and optimizing other business processes. E Inc.'s digital wholesale marketplace goes to market under the brand EBlock, and EINC's digital retail suite of products goes to market under the brand EDealer.

Cautionary Statement Regarding Forward-Looking Information

This news release contains forward-looking information that reflects the current expectations of management about the future results and opportunities for EINC. Forward-looking statements generally can be identified by words such as "will", "expects", "anticipates", "intends", "plans", "believes", "estimates", "prospects" or similar expressions suggesting future outcomes or events. More particularly and without limitation, this press release contains forward-looking statements and information concerning the Company's proposed voluntary delisting from the TSX, purchases of Shares made under the Offer and the Private Placement and the Board's views on the sufficiency of the size of the Offer. Such forward-looking statements reflect EINC's current beliefs and are based on information currently available to management, and there is no assurance that the voluntary delisting will occur, any Shares will be purchased under the Offer, the Private Placement will be completed or that the size of the Offer will be sufficient to provide all Shareholders with liquidity. Although EINC believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because EINC can give no assurance that they will prove to be correct. By its nature, such forward-looking information is subject to various risks and uncertainties, which could cause the actual results and expectations to differ materially from the anticipated results or expectations expressed. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date hereof and to not use such forward-looking information for anything other than its intended purpose. EINC undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.

SOURCE E Automotive Inc.

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