SpotLite360 IOT Solutions, Inc. Acquires Majority Interest in E3 Service Group

DENVER and VANCOUVER, British Columbia, March 10, 2022 (GLOBE NEWSWIRE) — SPOTLITE360 IOT SOLUTIONS, INC. (“SpotLite360” or the “Company”) (CSE: LITE) (OTC: SPLTF) (Frankfurt: 87A) announces that it has acquired a majority equity interest in E3 Service Group (“E3”). Further to the March 3, 2022 announcement of entering into a binding definitive agreement, the companies have successfully completed the transaction based upon the terms previously outlined in the definitive agreement. E3 will operate as a subsidiary of SpotLite360 and all E3 employees will be retained.

E3 has successfully built an award-winning design, engineering and implementation practice in the agricultural/cannabis environmental space. With 300 plus engineering projects in 13 states, E3 has supported customers and investors with event driven data to ensure that optimal environmental conditions are maintained for indoor cultivation facilities around the world. As a result, E3 customers experience an increase in production, higher quality products, and greater profitability. The integration of the SpotLite360 supply chain technologies and software with the operational capabilities of E3 will create a broader product portfolio capable of capturing additional event driven environmental and facility information along with proof of sustainability, chain of custody and ESG (Environmental, Social and Governance) data.

James Greenwell, President and CEO of SpotLite360 commented, “We are thrilled to forge this strategic relationship with the professionals at E3 who share our vision to deliver a sustainable agricultural supply chain. SpotLite360 looks forward to working together with E3 – shoulder to shoulder – to build a supply chain future in the agriculture industry that delivers process efficiency, supports regulatory and compliance mandates, improves product quality and provides the consumer with the proof of ESG claims that they are now demanding. Our engineering designs and supply chain platform will drive best in class models for optimal agricultural cultivation.”

Consideration for the acquisition of 51% of E3 will be US $1.0 million cash and 20 million shares of SpotLite360 at CAD $0.20 per share (the “Consideration Shares”). Cash will be paid from company treasury in two equal amounts, with US$500,000 paid on closing of the transaction and the balance to be paid on or before the one year anniversary of the closing. The Consideration Shares will be subject to the statutory four (4) month and one (1) day statutory hold period and a concurrent 12-month lock-up whereby the initial 25% of the Consideration Shares will be released on closing (subject to the statutory hold period) with the remaining 75% of the Consideration Shares released in equal tranches on the 6th, 9th and 12th month from closing. E3 also has the opportunity to earn up to 3 million warrants (each a “Warrant”) to purchase a common share of SpotLite360 upon achieving performance based milestones over the successive 12 months following the closing. Each Warrant, if granted, is exercisable for a period of 36 months from closing to purchase one additional common share at $0.20 per common share. The shareholders of E3 who are vending the majority interest in E3 to the Company are arm’s-length to the Company. E3 has an executed contracts backlog representing gross revenue in excess of CAD $6,000,000. The revenue from these customer engagements is expected to be fully realized in fiscal year 2022.

Bryson Guyer, Founder E3 Service Group added, “We are delighted to join the SpotLite360 family and we look forward to sharing our expanded industry vision and capabilities with our current and future customers. Our combined staff of engineering and technology expertise will create a new data driven cultivation world.”

The Company also announces the addition of Shawn Phillips as Senior Vice President of Operations. Mr. Phillips has a distinguished twenty plus year career in finance and operations. He has served as a C-level executive (CFO, CEO, GM) of a number of companies with national and international operations. His experience includes start-ups, acquisitions, strategy, operations, fund raising and public companies. The Company announces that it has granted an aggregate of 500,000 stock options (each, an “Option”) to Mr. Phillips in accordance with the Company’s stock option plan. Each Option is exercisable to acquire one common share in the capital of the Company (each a “Share”) at the price of $0.15 per Share, being the closing price of the shares on the Canadian Securities Exchange on March 4, 2022 for a period of ten (10) years from grant. This is a normal-course grant that comprises part of a long-term compensation and retention incentives program provided by the Company. An initial 71,500 Options vest immediately, and the remaining options will vest in five (5) equal tranches every six (6) month period thereafter.

In connection with the closing of the acquisition, the Company will pay a finder’s fee of 5% of the value of the consideration, paid in Shares at a deemed value of CAD $0.20 per Share to an arm’s length party.

None of the securities issued in connection with the acquisition of the majority interest in E3 will be registered under the United States Securities Act of 1933, as amended (the “1933 Act”), and none of them will be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the 1933 Act. This news release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of the securities in any state where such offer, solicitation, or sale would be unlawful.

The Company also announces that the Mr. Peter Nguyen has resigned as a director of the Company as of March 10, 2022.

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