ECC Ventures 3 Corp. Enters Definitive Agreement to Acquire Sparx Technology Inc.

VANCOUVER, BC / ACCESSWIRE / December 3, 2021 / ECC Ventures 3 Corp. ("ECC3" or the "Company") (TSXV:ECCT.P) further to its press release issued on August 3, 2021, the Company is pleased to announce that it has entered into a definitive amalgamation agreement (the "Amalgamation Agreement") dated effective December 2, 2021, pursuant to which it will acquire (the "Acquisition"), through its newly formed subsidiary, all the issued and outstanding share capital of Sparx Technology Inc. ("Sparx"). The Acquisition will constitute a reverse takeover and ECC3's Qualifying Transaction under the policies of the TSX Venture Exchange (the "Exchange"). Upon closing, ECC3 will change its name to Sparx Technology Inc.

Terms of the Acquisition

Sparx currently has 75,343,695 common shares (the "Sparx Shares"), US$250,000 in principal amount of convertible securities (the "Convertible Securities") and $460,000 in shareholder loans outstanding (the "Shareholder Loans"). The Acquisition will be completed by way of an amalgamation pursuant to which, inter alia, (i) ECC3 will complete a forward share split on a 1 for 1.2 basis (the "Share Split"), and (ii) shareholders of Sparx will be issued an aggregate of 52,000,000 post Share Split common shares of ECC3 at a deemed price of $0.25 per share (the "Consideration Shares") as consideration in exchange for their Sparx Shares. In addition, (i) the Convertible Securities will be settled for 1,348,329 post Share Split common shares of ECC3 (ii) $200,000 of Shareholder Loans will be settled for securities of ECC3 on the same terms as the QT Financing; (iii) $200,000 of the Shareholder Loans will be repaid upon or prior to completion of the Acquisition; and (iv) $60,000 of the Shareholder Loans will be converted into long-term debt of ECC3 due 16 months from completion of the Acquisition. Certain of the Consideration Shares will be subject to escrow and resale restrictions pursuant to the policies of the Exchange.

The Company will also issue 1,558,000 post-Share Split common shares of ECC3 to Jane K. Milliken Binns in connection with the Acquisition, at a deemed price of $0.25 per share. The payment of the finder's fee remains subject to Exchange acceptance.

Upon closing of the Acquisition, current securityholders of ECC3 will own 6,780,000 post Share Split common shares, 2,400,000 of which will be subject to escrow provisions pursuant to the policies of the Exchange, and 678,000 stock options will be exercisable at $0.0833 per post Share Split common share until ninety days from closing of the Acquisition, subject to the provisions of the Company's stock option plan, and 240,000 agent warrants will be exercisable at $0.0833 per post Share Split common share until June 14, 2026.