/NOT FOR DISTRIBUTION TO UNITED STATES OF AMERICA WIRE SERVICES OR
DISSEMINATION IN THE UNITED STATES OF
AMERICA/
TORONTO, Nov. 13, 2020 /CNW/ - This press release is
being disseminated as required by National Instrument 62–103 -
The Early Warning System and Related Take Over Bids and Insider
Reporting Issuers in connection with the filing of an early
warning report (the "Early Warning Report") regarding the
acquisition of securities of Ackroo Inc. (TSXV: AKR) (the
"Issuer"), with its head office located at 1250 South
Service Road, Unit A3-1 (3rd Floor), Hamilton, Ontario, L8E 5R9, by Shen Capital
Fund I L.P., by its General Partner, Shen Capital Management
Inc. ("Shen Capital"), with its head office
located at 130 Bloor Street
West, Suite 905, Toronto,
Ontario, M5S 1N5.
On November 12, 2020 (the
"Closing Date"), Shen Capital entered into a subscription
agreement to purchase 17,500,000 units of the
Issuer ("Units", and individually, a "Unit") for
$0.12 per Unit, each Unit to
consist of one Common Share and one warrant of the Issuer (a
"Warrant"), for aggregate proceeds of $2,100,000 (the "Private
Placement"). Each Warrant is exercisable until November 12, 2023 and entitles Shen Capital to
purchase an additional Common Share at an exercise price of
$0.18 per share, subject to
accelerated expiry in the event the closing trading price of the
Common Shares on the TSX Venture Exchange
("TSXV") equals or exceeds $0.28 per Common Share for a period of 20
consecutive trading days at any time on or after the
18th month from the Closing Date.
Prior to the Private Placement, Shen Capital owned, directly and
indirectly, no Common Shares. Following the Private
Placement, Shen Capital owns, directly and indirectly, 17,500,000
Common Shares, representing approximately 17.1% of the outstanding
Common Shares, and 17,500,000 Warrants.
Shen Capital has agreed that, until the TSXV approves Shen
Capital as a Control Person, which is expected to occur at the next
meeting of shareholders of the Issuer to take place on or before
June 30, 2021 (the "20% TSXV
Approval"), Shen Capital will not exercise the Warrant if it
results in owning 20% or more of the issued capital of the
Issuer. Accordingly, on a partially diluted basis, Shen
Capital holds 19.99% of the outstanding Common Shares.
Following receipt of the 20% TSXV Approval and the exercise in full
of the 17,500,000 Warrants to purchase Common Shares, Shen
Capital's ownership would represent approximately 29.3% of the
outstanding Common Shares on a partially diluted basis.
In addition to the foregoing, Shen Capital may increase or
decrease its beneficial ownership or control depending on market or
other conditions.
Pursuant to a Nominating Rights Agreement dated October 30, 2020 among the Issuer and Shen
Capital, for so long as Shen Capital owns at least 5% percent of
the outstanding issued capital of the Issuer, Shen Capital shall
have the right to appoint such number of board members in
proportion to its ownership percentage, rounded upwards to the
nearest whole number, but shall at all times have the right to
appoint one member, who shall initially be Francis Shen, the President of Shen
Capital. In addition, for so long as Shen Capital owns at
least 5% percent of the outstanding issued capital of the Issuer,
it shall be entitled to appoint one individual to attend as an
observer all meetings of the board or committees thereof, who shall
initially be Andrew Shen, the
Vice-President of Shen Capital.
A copy of the Early Warning Report with additional information
in respect of the foregoing matters may be found on
www.SEDAR.com.
SOURCE Shen Capital Management Inc.