Aumento Capital VIII’s Amalgamation Agreement with Eddy Smart Home Solutions

Torys LLP acted as counsel to Eddy Smart Home Solutions.

On September 13, 2021, Aumento Capital VIII Corporation and Eddy Smart Home Solutions Inc. entered into an amalgamation agreement, together with 2865357 Ontario Inc., a wholly-owned subsidiary of Aumento, pursuant to which Subco will amalgamate with Eddy to complete an arm’s length qualifying transaction in accordance with TSX Venture Exchange Policy 2.4 Capital Pool Companies (“CPC Policy”).

The transaction is structured as a three-cornered amalgamation and, as a result, the amalgamated corporation will become a wholly-owned subsidiary of Aumento at the time of completion. In connection with the transaction, Aumento will change its name to “Eddy Smart Home Solutions Inc.” (the “Resulting Issuer”) and be a technology issuer and continue to carry on the business of Eddy.

Under the terms of the amalgamation agreement, at the effective time, among other things, each holder of Eddy common shares shall exchange their shares for Resulting Issuer common shares on the basis of the exchange ratio, at a deemed price of C$0.60 per share.

There are currently 61,169,428 Eddy common shares outstanding. Immediately prior to the completion of the transaction, an aggregate of 12,594,569 Class B preferred shares in the capital of Eddy will convert into Eddy common shares on a one for one basis. Further, convertible debt in the capital of Eddy in the aggregate amount of C$2,500,000 will convert into an aggregate of 10,416,665 Eddy common shares. As a result of such conversions and the conversion of any subscription receipts offered under a concurrently announced private placement (assuming, among other things, the maximum gross proceeds are raised under the private placement, no exercise of the over-allotment option made available to the agents), it is anticipated that Eddy will have 134,180,662 shares outstanding immediately prior to the completion of the transaction.

Immediately following the completion of the transaction on a non-diluted basis, the current shareholders of Aumento will own 2,000,000 common shares in the Resulting Issuer (anticipated to be approximately 3%) and the holders of Eddy common shares existing immediately prior to the transaction (including any shares issued upon the conversion of the subscription receipts, the Class B shares and convertible debt) are anticipated to own approximately 67,743,388 common shares in the Resulting Issuer (anticipated to be approximately 97%), assuming, among other things, the maximum gross proceeds are raised under the private placement, no exercise of the over-allotment option made available to the agents.

The completion of the transaction is subject to the approval of Eddy shareholders holding at least 66 2/3% of the issued and outstanding voting securities. Eddy intends to hold a special meeting of its shareholders to approve the transaction prior to year-end.

Eddy is a Toronto-based award-winning innovative manufacturer of smart water metering products and related technologies, helping property owners protect, control, and conserve water usage by combining water sensing devices with behavioural learning software.

Aumento, incorporated under the Business Corporations Act (Ontario) on November 20, 2020, is a capital pool company as defined under the CPC Policy. Aumento has not commenced commercial operations other than to enter into discussions for the purpose of identifying potential acquisitions or interests.

The Torys’ team comprised of Janan Paskaran (Picture), Kate Stevens, Sarah Magee and Megan Funke (corporate/M&A).

Involved fees earner: Megan Funke – Torys LLP; Sarah Magee – Torys LLP; Janan Paskaran – Torys LLP; Kate Stevens – Torys LLP;

Law Firms: Torys LLP;

Clients: Eddy Smart Home Solutions ;

Author: Martina Bellini