EINC E Automotive Inc

• Eliminates negative impact of having a public listing with no trading volumes while maintaining flexibility to return to the TSX or a U.S. exchange in the future
• Allows any shareholder to remain a shareholder and participate in any potential future upside in delisted company
• Provides liquidity and certainty of value at a premium for shareholders that do not wish to remain shareholders of an unlisted company
• Lower transaction costs and shorter timeline as compared to a go private transaction

TORONTO, April 10, 2023 /CNW/ - E Automotive Inc. d/b/a EINC (TSX: EINC) ("EINC" or the "Company") announced today that its board of directors ("Board"), the Company's shareholders  and the Toronto Stock Exchange have all approved the voluntarily delisting of the Company's common shares ("Shares") from the Toronto Stock Exchange (the "TSX"). The Company also announced today that its Board has approved the commencement of a substantial issuer bid under which the Company will offer to repurchase for cancellation up to C$7.5 million of its Shares to provide existing shareholders an opportunity for liquidity in advance of the voluntary delisting.

The Company has decided to delist from the TSX after concluding that maintaining the listing does not offer substantial benefits to the Company and its shareholders. The Company will, however, remain a "reporting issuer" under applicable Canadian securities laws and continue to provide regular comprehensive disclosure, providing the Company with the flexibility to potentially return to the TSX or a U.S. exchange in the future in a cost effective manner.

In making the decision to delist, the Company considered, among other things, the direct and indirect costs associated with having the Company's Shares listed on a stock exchange and the significant changes in the Company's institutional shareholder base since its oversubscribed initial public offering (the "IPO"). Institutional investors comprised over 90% of the IPO but as economic and market conditions deteriorated the majority of such investors sold their positions before the Company had even reported a single quarter following the IPO. As of today, approximately 95% of institutional investors that acquired Shares on the IPO have sold their positions.

The Company also considered its extremely limited trading volumes and the Company's small public float (approximately 10% of the Shares are held by investors who are not members of management, directors or employees of the Company). Limited trading volumes and a small public float limit future institutional investment opportunities and can drive volatility in the price of the Company's Shares unrelated to the Company's performance. However, should market conditions and Company performance improve, the Company may seek to list its shares again in the future in connection with investment from institutional investors.

The Company also compared a delisting to a traditional going private transaction, and determined that the benefits of a delisting (including giving all Shareholders the option to participate in any potential future upside, lower transaction costs and a shorter timeline) outweighed the benefits of a going private transaction in the Company's current circumstances.

The TSX allowed (in accordance with Section 720 of the TSX Company Manual) the Company to provide written evidence that Shareholder approval for the voluntary delisting was obtained, with holders of approximately 89% of all Shares voting in favour, and holders of approximately 59% of all Shares excluding Shares held by Intercap Equity Inc. (which beneficially owns or exercises control or direction over approximately 72% of the Shares on a non-diluted basis) voting in favour.

The Company expects to delist its Shares from the TSX on or about May 24, 2023, at which point there will be no public market to trade the Company's Shares. The Company will, however, remain a "reporting issuer" under applicable Canadian securities laws. As a result, Shares that are currently freely tradeable in Canada will continue to be freely tradeable in Canada, and the Company will continue to disseminate its continuous disclosure documents as required by law until it is no longer required to do so.

In considering the voluntary delisting, the Company was mindful of the effect the delisting will have on 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 Board has approved the commencement of a substantial issuer bid (the "Offer") pursuant to which the Company will offer to acquire up to C$7.5 million of Shares at a price of C$3.50 per Share. The Board has obtained a valuation from Canaccord Genuity Corp. to the effect that, based on and subject to the assumptions and limitations stated in such opinion, as of April 10, 2023 the fair market value per Share falls within the range of C$3.00 to C$4.60 per Share.  The closing price of the Shares on the Toronto Stock Exchange (the "TSX") on April 10^th, 2023, the last full trading day prior to the Company's announcement of its intention to make the Offer, was C$3.01. 

Details of the Offer, including instructions for tendering Shares and a copy of the formal valuation, will be included in the formal offer to purchase and issuer bid circular, letter of transmittal and the notice of guaranteed delivery (collectively, the "Offer Documents"). The Offer Documents will be mailed to Shareholders and filed with applicable Canadian securities regulatory authorities on or about April 18, 2023 and made available without charge on the Company's SEDAR profile page at www.sedar.com, as well as being posted on the Company's website at e.inc. Shareholders should carefully read the Offer Documents prior to making a decision with respect to the Offer.

The Offer will not be conditional upon any minimum number of Shares being tendered. The Offer will, however, be subject to other conditions and the Company will reserve the right, subject to applicable laws, to withdraw or amend the Offer, if, at any time prior to the payment of deposited Shares, certain events occur. If Shares with an aggregate purchase price of more than C$7.5 million are properly tendered and not properly withdrawn, the Company will purchase the Shares on a pro rata basis except that "odd lot" tenders (of holders beneficially owning fewer than 100 Shares) will not be subject to pro-ration.

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 has committed to finance up to the full amount of the proposed private placement. Depending on demand for the private placement, Intercap's commitment may decrease, or the size of the private placement may increase. Any Shareholders that would like to participate in the private placement and can do so on a prospectus exempt basis in accordance with applicable securities laws may contact the Company.

All of the Company's directors and officers support the delisting and do not intend to tender any Shares to the Offer. 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.

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.

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, the potential for listing again, potential future upside in the delisted company, purchases of Shares made under the Offer and the potential private placement. 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 or relisting will occur, any Shares will be purchased under the Offer, the private placement will be completed or that the value of the Shares will increase in the future. 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.