January 21, 2019
Toronto, Ontario, Canada
EESTOR ANNOUNCES CREDIT FACILITY
Toronto, Ontario – January 21, 2019 – EEStor Corporation (“EEStor” or the “Company“) (TSX VENTURE:ESU) announced today that it has entered into a loan agreement for a secured credit facility of up to C$300,000 from Dr. Robert Tocchio, a significant shareholder of the Company.
The credit facility is secured by a pledge of all of the Company’s shares in Zenn Capital Inc, the holding company which owns all of the Company’s equity interests in subsidiary, EEStor, Inc., as well as an assignment of loans made by the Company to EEStor, Inc. and related security. Draws under the credit facility bear interest at the rate of 6.0% per annum and must be repaid by January 21, 2020. The lender is entitled to elect to receive repayments of principal under the credit facility in common shares of the Company based on the market price at the time of repayment. As partial consideration for the provision of the credit facility, the Company has agreed to grant to the lender warrants to acquire up to 2,307,692 common shares, each warrant exercisable until January 21, 2020 at a price of C$0.13 per share.
EEStor intends to use the funds available under the credit facility for working capital and general corporate purposes. The credit facility is subject to all necessary regulatory approvals, including the approval of the TSX Venture Exchange.
Prior to the loan transaction, Dr. Tocchio owned, directly and indirectly, 9,964,000 common shares, or approximately 7.95% of the issued and outstanding shares (13.47% on a partially diluted basis assuming the exercise of all warrants owned directly or indirectly by him). If all warrants are issued to Dr. Tocchio in connection with the loan transaction, Dr. Tocchio would continue to directly and indirectly own 9,964,000 common shares, or approximately 7.95% of the issued and outstanding shares (but 14.95% on a partially diluted basis assuming the exercise of all warrants owned directly or indirectly by him).
By virtue of Dr. Tocchio’s security holdings in the Company, the loan transaction is considered to be a “related party transaction” as defined under Multilateral Instrument 61-101 (“MI 61-101”) and TSX Venture Exchange policy 5.9 (“Policy 5.9”). The transaction was however exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 and Policy 5.9, as neither the fair market value of the loan nor the consideration to be paid to the lender in connection with the loan exceeded 25% of the Company’s market capitalization at the relevant time. The terms of the loan were only recently agreed to and therefore the Company did not have sufficient time to announce the loan transaction at least 21 days prior to the entry into of the loan agreement.
About EEStor Corporation
EEStor is a developer of high energy density solid-state capacitor technology utilizing the Company’s patented Composition Modified Barium Titanate (CMBT) material. The Company is focused on licensing opportunities for its technology across a broad spectrum of industries and applications.
The Company’s success depends on the commercialization of its technology. There is no assurance that EEStor will be successful in the licensing of the technology. Readers are directed to the “Risk Factors” disclosed in the Company’s public filings.
For additional information please contact:
Chief Executive Officer
Tel. 416-535-8395 ext. 3
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.