Canada. ECC Ventures 2 Corp. ('ECC2' or the 'Company') (TSXV: ETWO.P) announces that in connection with its proposed qualifying transaction to acquire Long Island Beverages (the 'QT') pursuant to a definitive agreement (the 'Definitive Agreement'), as announced on September 20, 2019, the parties have entered into an amendment agreement (the 'Amendment') dated effective February 24, 2020.
Pursuant to the Amendment, effective March 3, 2020, as a first step to the transactions contemplated in the Definitive Agreement, Long Island Beverages Corp., a private British Columbia corporation ('LIBC') acquired 100% interest in Long Island Beverages LLC, a New York limited liability company ('LIBB') from Long Blockchain Corp., a US listed company ('LBC'), (the 'LIBB Acquisition'). LIBB is now a wholly owned subsidiary of LIBC
As consideration for the LIBB Acquisition, LIBC issued 4,994,650 subscription receipts (the 'Subscription Receipts') to LBC and its assignees, and an unsecured, non-interest-bearing promissory note to LBC in the amount of $367,000 (the 'Promissory Note'). Subject to any holdback adjustment relating to LIBB's working capital, upon closing of the QT, each Subscription Receipt (or the common shares of LIBC to which they convert) will automatically convert to one post-forward-split common share of ECC2, and $183,500 of the Promissory Note will be repaid, with the balance being due on the earlier of one year from closing of the QT, or the raising of $2,000,000 in equity financing. This represents a reduction in the original purchase price of 7,000,000 post-forward-split common shares of ECC2 and a $500,000 cash payment. Pursuant to the terms of the QT, ECC2 will complete a forward share split of its common shares on a 1 for 1.5 basis and the security holders of LIBC, will be issued an aggregated 13,540,105 post-forward-split common shares of ECC2, including the shares issuable in connection with the Subscription Receipts, subject to any holdback adjustment relating to LIBB's working capital, as consideration for the QT. An additional 2,700,000 currently issued post-forward-split common shares of the Company will be transferred within escrow to certain members of the new management team. The Company will also issue 890,000 post-forward-split common shares to certain finders in connection with the QT. All securities issued will be subject to a four month hold period. All shares issued by ECC2 will be issued at a deemed price equal to the price of the Financing, as defined below. In connection with closing of the QT, the Company intends to complete a private placement financing (the 'Financing'). The terms of the financing have yet to be finalized. The financing will be announced once the final terms have been determined. LIBB operates in the non-alcoholic ready-to-drink segment of the beverage industry under its flagship brand 'The Original Long Island Brand Iced Tea', a premium beverage made from a proprietary recipe. Long Island Iced Tea is sold across the U.S., primarily on the East Coast, through a network of national and regional retail chains and distributors. LIBC has assembled the capital markets and beverage industry management team to carry out the growth plans for the beverage business, and will be an integral part of implementing Long Island Beverages expansion in the U.S., with plans to increase distribution into all states, as well as to expand in to Canada, Australia, New Zealand, and the Caribbean.
The QT will constitute a reverse take over and the Company's qualifying transaction under the policies of the TSX Venture Exchange (the 'Exchange'). Completion of the QT is subject to a number of conditions, including forward split of the Company's existing share capital on a 1.5 to 1 basis and, Exchange acceptance. The QT cannot close until the required approvals are obtained. Additional disclosure regarding the QT as required by the policies of the Exchange will be provided by the Company in future press releases, and further information concerning LIBC and LIBB, including audited annual and unaudited interim financial statements, will be included in the filing statement (the 'Filing Statement') being prepared by the Company in connection with the QT, which will be accessible under ECC2's profile on SEDAR. Trading of ECC2's common shares will remain halted pending further filings with the Exchange. The Company is working diligently to complete the remaining filings with the Exchange, with a view to completing the proposed transaction in short order.
Contact:
Tel: 778-331-8505
Email: sackerman@emprisecapital.com.
ECC VENTURES 2 CORP. 