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TORONTO, July 16, 2020 /CNW/ - OV2 Investment 1 Inc. (the
"Corporation") (TSXV: OVO.P), a capital pool company under Policy
2.4 (the "CPC Policy") of the TSX Venture Exchange ("Exchange"), is
pleased to announce that it has entered into a non-binding Letter
of Intent dated as of today's date with EasTower Group, Inc.
("EasTower") for the purposes of completing a Qualifying
Transaction ("QT") as defined in the CPC Policy. The QT is an arm's
length transaction and will be completed by way of a merger or
other business combination transaction whereby the Corporation,
EasTower and EGI Investments, Inc. ("EGI") will combine and
shareholders of EasTower and EGI immediately prior to the QT will
acquire a controlling interest in the resulting issuer (the
"Resulting Issuer"). The final structure of the QT is subject to
the receipt of tax, corporate and securities law advice for the
Corporation, EasTower and EGI. Upon completion of the QT, the
Resulting Issuer will carry on the business of EasTower.
EasTower is a private company incorporated under the laws of
Florida on July 27, 2015 and based in Boca Raton, Florida. EasTower, through its
wholly-owned subsidiary EasTower Communications, Inc., is a U.S
provider of wireless communications infrastructure and related
services, founded in 2015. The Company specializes in the
construction, installation, upgrades and maintenance of wireless
communication systems, including 5G, 4G and small cell
deployments as well as first responder or FirstNet initiatives.
Their diverse, top-tier customer base includes major telecom
providers, global OEMs, corporations and federal agencies. EasTower
is currently focused on operating within the southeastern U.S.
states and planning to expand to additional southwestern states
across America.
After giving effect to a planned 75:1 consolidation of its
outstanding common stock and the conversion of outstanding
convertible promissory notes, EasTower will have 15,450,141 shares
of common stock (the "EasTower Shares") outstanding held by 78
shareholders. The three principals of EasTower, Vlado Hreljanovic, Paul
Perialas and Margaret
Perialas, collectively hold 22.75% of EasTower.
EGI is a private company incorporated under the laws of
Delaware on March 22, 2019. EGI is holder of convertible debt
in EasTower, its only asset. After giving effect to a planned 3:1
consolidation of its outstanding common stock, and
conversion/settlement of the EasTower debt prior to closing, the 45
EGI shareholders shall collectively hold 8,443,533 shares of common
stock (the "EGI Shares").
Terms of the QT
The QT is currently expected to proceed by way of a merger
transaction pursuant to which EasTower and EGI will become
wholly-owned subsidiaries of the Corporation. Immediately prior to
completion of the transaction, the Corporation intends, subject to
the receipt of all necessary shareholder approvals, to consolidate
its common shares on the basis of 0.79730908 of a
post-consolidation common share for every one pre-consolidation
common share. Following this share consolidation, and in
consideration of the Corporation's acquisition of EasTower and EGI,
each EasTower Share and each EGI Share that is issued and
outstanding immediately prior to completion of the QT will be
exchanged for one post-consolidation common share of the
Corporation, based on an agreed fully-diluted combined valuation of
EasTower and EGI of approximately $6
million.
In conjunction with the QT, EasTower intends to complete a
brokered private placement to secure a minimum of $3,000,000 gross proceeds from an equity
financing (the "Financing"). The net proceeds of the Financing will
be used to fund the continued expansion of EasTower's
business, provide working capital, and for general and
administrative expenses.
Completion of the QT is subject to a number of conditions,
including but not limited to:
- completion of satisfactory due diligence reviews by the
Corporation and EasTower of the business and affairs of the other
party;
- execution of a binding definitive agreement between the
Corporation and EasTower;
- receipt of all applicable regulatory, shareholder and TSXV
approvals; and
- completion of the Financing for gross proceeds of at least
$3,000,000.
Management and Board of Directors of Resulting Issuer
Upon completion of the QT, it is anticipated that all of the
existing directors and officers of the Corporation will
resign. Vlado P. Hreljanovic,
President and CEO of EasTower will lead the new management
team. Further information with respect to the identity of each
of the proposed directors and officers of the Resulting Issuer will
be provided separately, once determined.
Trading Halt
Trading in the common shares of the Corporation has been halted
and the shares are not expected to resume trading until the QT has
been completed, or until the Exchange receives the requisite
documentation to resume trading. If the QT is completed, the
Corporation expects to be listed on the Exchange as a technology
issuer.
Sponsorship
The Corporation intends to make an application for exemption
from the sponsorship requirements of the TSXV in connection with
the QT, however there is no assurance that the TSXV will exempt the
Corporation from all or part of applicable sponsorship
requirements.
Further Information
The Corporation will issue a subsequent press release in
accordance with the policies of the TSXV providing further details
in respect of the Qualifying Transaction, including information
relating the transaction structure, the Financing and summary
financial information of EasTower.
Forward Looking Information
Statements in this press release regarding EasTower's business
which are not historical facts, are "forward-looking statements"
that involve risks and uncertainties, such as terms and completion
of the proposed transaction. Since forward-looking statements
address future events and conditions, by their very nature, they
involve inherent risks and uncertainties. Actual results in each
case could differ materially from those currently anticipated in
such statements.
Completion of the transaction is subject to a number of
conditions, including but not limited to, Exchange acceptance and
if applicable pursuant to Exchange Requirements, majority of the
minority shareholder approval. Where applicable, the transaction
cannot close until the required shareholder approval is obtained.
There can be no assurance that the transaction will be completed as
proposed or at all.
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 a capital pool company should be considered highly
speculative.
The TSX Venture Exchange Inc. has in no way passed upon the
merits of the proposed transaction and has neither approved nor
disapproved the contents of this press release."
NEITHER 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.
SOURCE OV2 Investment 1 Inc.