Shine Box Capital Announces Letter of Intent Signed for Qualifying Transaction with Electro Metals and Mining Inc.

Calgary, Alberta--(Newsfile Corp. - February 24, 2023) - Shine Box Capital Corp. (TSXV: RENT.P) a Calgary, Alberta based corporation with offices at 1900 - 520 3^rd Avenue, Calgary, Alberta ("Shine Box") is pleased to announce it has signed a non-binding Letter of Intent dated February 16, 2023 (the "LOI"), with federally registered private Canadian company Electro Metals and Mining Inc. with its registered address at 1500 - 2 Queen Street East, Toronto, Ontario ("Electro") which sets forth the basic terms and conditions upon which Shine Box and Electro will combine their business operations (the "Transaction").

Shine Box is a "capital pool company" and it is intended that the Transaction will constitute its "Qualifying Transaction", as such term is defined in the TSX Venture Exchange ("TSXV") Policy 2.4 - Capital Pool Companies.

It is intended that Shine Box and Electro shall complete the Transaction by way of a proposed business combination that would result in the reverse takeover of Shine Box by Electro, subject to Electro successfully completing the Private Placements (as defined below) and other conditions precedent as described in detail below, including satisfactory execution of a definitive agreement. The LOI was executed on February 17, 2023. Further details of the Transaction and definitive agreement will be disclosed in due course.

Electro is a privately held Canadian company based in Toronto, Ontario, which is engaged in the acquisition, exploration and potential development of precious and critical metals in Quebec, Canada. Electro has a 100% - owned block of claims covering 795 hectares with historical copper - silver mineralization and, on an adjacent block of 5,830 hectares, Electro has an option agreement to earn 100% interest in an advanced stage exploration property which hosts resources of copper - zinc - silver - gold, located approximately 55 km by gravel and paved road northwest of Rouyn-Noranda, Quebec.

Shine Box intends to apply to the TSXV to have the common shares of the Resulting Issuer listed and posted for trading on the TSXV. The Transaction is an arm's length transaction.

The Transaction

It is intended that Shine Box and Electro will enter into a business combination by way of a share exchange, three-cornered amalgamation, merger, amalgamation, arrangement or other similar form of transaction (collectively, the forgoing with any related transaction, which will result in Electro and all of its subsidiaries and affiliates becoming directly or indirectly wholly-owned subsidiaries of Shine Box (the "Resulting Issuer")). The parties agree, however, that the final structure of the business combination is subject to receipt by the parties of satisfactory tax, corporate and securities law advice in each party's sole discretion.

For the purposes of the Transaction, the deemed value of each common share in the capital of Shine Box (the "Common Shares") shall be $0.20 per Common Share based on Shine Box's capitalization prior to the Consolidation (as defined below), and the deemed value of each ordinary share in the capital of Electro (the "Ordinary Shares") shall be $0.30 per Ordinary Share based on the pricing of the Private Placements (as defined below), or such other amount as may be agreed to by the parties and accepted by the TSXV (the "Electro Share Value"). Prior to completing the Transaction, it is intended that Shine Box shall consolidate the Common Shares or the exchange ratio of the Transaction will be similarly adjusted (the "Consolidation") on the basis of 1 post-Consolidation Common Share for every 1.50 pre-Consolidation Common Shares, thereby resulting in the deemed value of the Common Shares, post-Consolidation, being equal to the Electro Share Value. Each Shine Box option and warrant shall be adjusted so that the number of shares issuable upon exercise, and the exercise price thereof, are adjusted to give effect to the Consolidation. In the event that the Electro Share Value changes based on the pricing of the Private Placements, then the Consolidation shall be adjusted according (e.g., if the pricing of the Private Placements is $0.35 per share then the Consolidation would be 1.75 to 1).

The authorized share capital of Shine Box consists of an unlimited number of Common Shares without nominal or par value and an unlimited number of non-voting preferred shares without nominal or par value, issuable in series, of which 6,000,000 Common Shares are issued and outstanding and a total of 600,000 Common Shares are reserved for issuance under management stock options and 300,000 Common Shares are reserved for issuance under agent's stock options, such management stock options are to be exercised in connection with the Transaction, post-Consolidation. As at September 30, 2022, Shine Box has approximately $68,853 in cash. Shine Box will not incur any material expenses except in the ordinary course of its listing and except as contemplated herein unless notice has been provided to Electro.

As of the date hereof, the securities of Electro that are issued and outstanding are 33,146,560 Ordinary Shares, 12,987,110 warrants, 3,314,656 Ordinary Shares are reserved for issuance under employee stock options, and 2,000,000 shares to be distributed to Globex Mining Enterprises (the "Optionor") as per an amended option agreement dated October 2, 2022, among Electro and the Optionor. Other than as disclosed herein, there are no securities convertible into or exchangeable for, or other rights to acquire, Ordinary Shares of Electro outstanding and no person has any agreement, right or privilege capable of becoming such for the purchase, subscription, allotment or issue of any of the unissued securities of Electro, such condition being subject to change upon agreement with Shine Box should funds be required for filings prior to closing of the Transaction.

The Consolidation or exchange ratio to the Transaction shall not exceed 2 to 1 unless otherwise agreed by the parties.

Trading in the Common Shares will remain halted pending the satisfaction of all applicable requirements of Policy 2.4 of the TSXV. There can be no assurance that trading of Common Shares will resume prior to the completion of the Transaction. Shine Box will hold a meeting of its shareholders to vote on the Transaction and will require that a majority of the votes of its shareholders vote in favour of the Transaction in order to proceed with it. Further details concerning the Transaction (including additional financial information) and other matters will be announced if and when a definitive agreement is reached.

Concurrent Private Placements

Electro expects (a) to complete a brokered private placement offering of Ordinary Shares, or units, at a price of $0.30 per Ordinary Share or unit, to raise gross proceeds of no less than $1,500,000 on behalf of Shine Box by way of subscription receipt offerings (the "Ordinary Share Offering"). Shine Box shall cooperate and facilitate the private placement financing provided all cost and fees relating to such financing is borne by Electro and (b) Electro will raise a minimum of $2,000,000 and a maximum of $4,000,000 by issuing flow through shares (the "Flow-Through Share Offering"), (the Ordinary Share Offering and the Flow-Through Share Offering collectively, the "Private Placements"), such that after taking into account the proposed private placement, the share issuance to Optionor, and business combination the resultant issuer will have a minimum of approximately 50,146,560 and a maximum of 55,146,560 shares outstanding, and approximately 64,065,135 to 69,065,135 shares fully diluted, subject to additional warrants issued in connection with the financing.

Finder's Fee

In conjunction with the Transaction and upon completion of the concurrent financing, a finder's fee of up to a maximum of 1,000,000 common shares of the Resulting Issuer (the "Finders Shares") will be issued as compensation to two third party groups that will assist with the Ordinary Share Offering, subject to certain conditions and the limitations of TSXV policy 5.1 and TSXV policy 2.4. The third parties will have the right to allocate to their designated company or certain individuals prior to the closing of the Transaction. The Finders Shares will be subject to the standard TSX hold period. The third party groups will forego typical cash and finder's warrants payments upon agreeing to receive the Finders Shares. Finder's Fees of up to 7% cash and 7% warrants may be paid in connection with the Flow-Through Share Offering.

Name Change

Upon completion of the Transaction, Shine Box intends to change its name to "Electro Metals and Mining Inc." or such other name as Shine Box may otherwise determine, and the parties anticipate that the TSXV will assign a new trading symbol for the Resulting Issuer.

Shareholder Meeting

Matters to be approved by Shine Box's shareholders in connection with the Transaction, including the proposed name change and Consolidation, will be sought from Shine Box's shareholders at its annual and special meeting to be held on a date to be announced by Shine Box and intended to be described in further detail in a management information circular relating to such meeting.

Officers, Directors, and Insiders of the Resulting Issuer

The current officers and directors of Shine Box intend to resign prior to the closing of the Transaction. A new slate of five directors will be appointed and put up for election as determined by Electro to be described in further detail upon the announcement of a definitive agreement.

Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable pursuant to TSXV Requirements, majority of the minority shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release.

About Shine Box Capital Corp.

Shine Box is a "Capital Pool Company" that completed its initial public offering and obtained a listing on the TSXV on November 29, 2019 (trading symbol: "RENT.P"). It does not own any assets, other than cash or cash equivalents. The principal business of Shine Box is to identify and evaluate opportunities for the acquisition of an interest in assets or businesses and, once identified and evaluated, to negotiate an acquisition or participation subject to acceptance by the TSXV so as to complete a qualifying transaction in accordance with the policies of the TSXV.

For further information, please contact:

Shine Box Capital Corp.
Nebojsa Dobrijevic
Phone: (416) 628-8589
Email: [email protected]

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of TSX Venture Exchange) accepts responsibility for the adequacy of accuracy of this release.

Forward-Looking Information

Completion of the proposed Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable, disinterested shareholder approval. Where applicable, the proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the proposed Transaction will be completed as proposed or at all.

Investors are cautioned that any information released or received with respect to the proposed Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Shine Box should be considered highly speculative.

The TSXV has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release.

All information contained in this news release with respect to Shine Box and Electro was supplied by the parties, respectively, for inclusion herein, and each such party has relied on the other party for any information concerning such party.

This news release contains forward-looking statements relating to the timing and completion of the proposed Transaction, the share capital of the Resulting Issuer, the future operations of Shine Box, Electro, and the Resulting Issuer, the proposed directors, officers and advisors of the Resulting Issuer and other statements that are not historical facts. Forward-looking statements are often identified by terms such as "will", "may", "should", "anticipate", "expects" and similar expressions. All statements other than statements of historical fact, included in this release, including, without limitation, statements regarding the proposed Transaction and the future plans and objectives of Shine Box, Electro, and the Resulting Issuer are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from Shine Box's, Electro's, and the Resulting Issuer's expectations include the failure to satisfy the conditions to completion of the proposed Transaction set forth above and other risks detailed from time to time in the lings made by Shine Box, Electro, and the Resulting Issuer with securities regulators.

The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of Shine Box, Electro, and the Resulting Issuer. As a result, Shine Box, Electro, and the Resulting Issuer cannot guarantee that the proposed Transaction will be completed on the terms and within the time disclosed herein or at all. The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement. The forward-looking statements contained in this news release are made as of the date of this news release and Shine Box, Electro, and the Resulting Issuer expressly disclaim any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities law.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/156153