NOT FOR DISTRIBUTION TO UNITED STATES NEWS SERVICES OR DISSEMINATION IN THE UNITED STATES
Toronto, Ontario--(Newsfile Corp. - June 19, 2018) - Skyscape Capital Inc. (TSXV: SKY.P) ("Skyscape" or the "Company"), a capital pool company, is pleased to announce that it has entered into a non-binding letter of intent (the "LOI") dated June 8, 2018 with Salida Energy Inc. ("Salida") which outlines the general terms and conditions of a proposed transaction (the "Proposed Transaction") that will result in Skyscape acquiring all of the issued and outstanding shares of Salida (the "Salida Shares") in exchange for shares of Skyscape (the "Skyscape Shares"). The Proposed Transaction is currently expected to be completed by way of a three cornered amalgamation (the "Amalgamation") between Skyscape and Salida or other similar transaction which will result in Salida becoming a wholly-owned subsidiary of Skyscape.
The LOI is to be superseded by a definitive agreement (the "Definitive Agreement") between Skyscape and Salida with such agreement to include representations, warranties, conditions and covenants typical for a transaction of this nature. The Proposed Transaction is subject to, among other things, receipt of the requisite shareholder approval of Salida, final approval of the TSX Venture Exchange (the "Exchange") and standard closing conditions, including the conditions described below. The parties have agreed that during the period from signing the LOI through to execution of the Definitive Agreement, each of Skyscape and Salida will continue their respective operations in the ordinary course and will not solicit or accept alternative offers (subject to fiduciary duties). Subject to satisfactory completion of due diligence, the parties expect to execute the Definitive Agreement on or about July 30, 2018 (or such other date as may be mutually agreed in writing between Skyscape and Salida) and have agreed to use their best efforts to complete the Proposed Transaction by August 31, 2018 (or such other date as may be mutually agreed in writing between Skyscape and Salida).
The Proposed Transaction will constitute the Company's qualifying transaction (the "Qualifying Transaction") pursuant to Policy 2.4 — Capital Pool Companies (the "Policy") of the Exchange.
The Proposed Transaction is not a "Non Arm's Length Qualifying Transaction" pursuant to Section 2.1 of the Policy and, as such, the Company is not required to obtain shareholder approval for the Proposed Transaction. However, the Company intends to hold a special meeting of shareholders to approve certain matters ancillary to the Proposed Transaction, including a name change, and a change in the board of directors effective upon closing of the Proposed Transaction ("Closing"). The Company currently intends to call the special meeting as soon as practicable and to be held prior to August 31, 2018.
Upon completion of the Proposed Transaction, Skyscape will continue on with the business of Salida with Salida as its wholly-owned, operating subsidiary (the Company after the Proposed Transaction being referred to herein as the "Resulting Issuer").
The Proposed Transaction
It is currently anticipated that the Proposed Transaction will be effected by way of the Amalgamation whereby Skyscape will acquire all of the issued and outstanding Salida Shares such that, in accordance with the Amalgamation, each shareholder of Salida (each, a "Salida Shareholder") will receive Skyscape Shares issued at a deemed issue price of $0.75 (the "Issue Price") in exchange for the Salida Shares held by such holder.
It is currently anticipated that the insiders of the Resulting Issuer will include each of Cameron MacDonald, Neil Burrows, Neil Wilson, and Louis Leote, who are expected to become directors and/or senior officers of the Resulting Issuer. Additional insiders of the Resulting Issuer will include: Brian Skinner, Warren Brown and Simon Akit.
As a result of the Amalgamation, Salida will become a wholly-owned subsidiary of Skyscape and Skyscape will continue on with the business of Salida. Upon Closing, the name of the Resulting Issuer will be changed to "Salida Energy Inc." or such other name as may be acceptable to Salida and the Exchange.
All Skyscape Shares issued pursuant to the Proposed Transaction, except those certain Skyscape Shares issued to U.S. persons who are affiliates (as defined in Rule 144(a)(1) under the United States Securities Act of 1933, as amended (the "U.S. Securities Act")) of Salida at the time the Proposed Transaction is submitted for vote or consent by the shareholders of Salida, will be freely tradable under applicable securities legislation but may be subject to an Exchange imposed restriction on resale.
Certain of the Skyscape Shares to be issued to the Salida Shareholders pursuant to the Proposed Transaction, including up to 100% of the securities to be issued to "Principals" (as defined under applicable laws), may also be subject to escrow provisions imposed pursuant to the policies of the Exchange.
None of the securities to be issued pursuant to the Amalgamation have been or will be registered under the U.S. Securities Act, or any state securities laws, and any securities issued pursuant to the Amalgamation are anticipated to be issued in reliance upon available exemptions from such registration requirements pursuant to Section 3(a)(10) of the U.S. Securities Act and applicable exemptions under state securities laws. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities.
Salida was incorporated under the laws of the Province of Alberta on April 20, 2015. Salida is a growth oriented private Canadian oil & gas company focused on growth through a combination of low risk, proven producing accretive acquisitions, and organic growth focused in Western Canada. Salida currently has no production and has not conducted material operations since its incorporation other than to identify potential acquisitions. Fern MacDonald of British Columbia is the largest single shareholder of Salida.
The current directors and officers of Salida are Cameron MacDonald (President, CEO and Director), Neil Burrows (CFO), Brian Skinner (VP Exploration and Director), Warren Brown (Director) and Simon Akit (Director).
Proposed Management of the Resulting Issuer
Subject to Exchange approval, on completion of the Proposed Transaction, it is currently anticipated that the board of directors of the Resulting Issuer will consist of five directors, including the following individuals: Brian Skinner, Simon Akit, Warren Brown and Cameron MacDonald. Management of the Resulting Issuer will include: Cameron MacDonald (Chief Executive Officer), Neil Burrows (Chief Financial Officer), Neil Wilson (Vice President, Engineering), Luis Leote (Vice President, Exploration) and Robert Lee (Vice President, Operations). Brief biographies of the proposed officers are set forth below.
Cameron MacDonald — Chief Executive Officer and Director
Mr. MacDonald is the founder, President & CEO of Macam Group of Companies, founded in 2002 and specializing in merchant/investment banking, research and trading, capital markets advisory to TSX & TSX-V companies spanning across North America, South America, the Middle East and North Africa. Mr. MacDonald is also Chairman of i4Media Corporation, a private technology and new media investment holding company, including Quickmobile.com. Previously Mr. MacDonald was a director of BCT Structures.
Neil Burrows — Chief Financial Officer
Mr. Burrows has over 30 years of experience in the oil and gas industry. He has held various accounting and finance positions including: Vice President Finance and Chief Financial Officer of Striker Exploration Corp., Alston Energy Inc., Standard Exploration Ltd., Renegade Oil and Gas Ltd., Expedition Energy Inc. and prior to that he was the divisional controller for Addison Energy Inc. before it was sold to NAL Oil & Gas Trust.
Neil Wilson — VP Engineering
Mr. Wilson has over 25 years of experience in the oil and gas industry specializing in operations, engineering, exploitation, reservoir engineering, acquisitions and divestitures. Prior thereto, he was Vice President and Chief Operating Officer at Toro Oil & Gas Ltd., Codero Energy Inc./Resolute Energy Inc., Rio Alto Exploration/Canadian Natural Resources Ltd., and Cabre Exploration Ltd./Enerplus, among others.
Luis Leote — VP Exploration
Mr. Leote has over 25 years of geology, geotechnical and E&P management experience. He was previously founder and Chief Geologist at Toro Oil & Gas Ltd., TAQA NORTH Ltd., Trilogy Energy, Paramount Resources, Pivotal Energy, Manhattan Resources, Ketch Resources and Compton Petroleum among others.
Robert Lee — VP Operations
Mr. Lee has over 35 years of upstream oil and gas experience in petroleum and natural gas production operations in the Western Canadian Sedimentary Basin. Most recently Robert held the position of Team Lead Production Operations with Sinopec Daylight Energy. Prior to that, Robert held various positions of increasing field responsibility with intermediate sized companies including Poco Petroleum Ltd., Burlington Resources Ltd. and ConocoPhillips.
Brian Skinner — Director
Mr. Skinner has over 40 years of experience as a professional geoscientist and has been a director of Salida since its inception. Currently, Mr. Skinner is the President of Rock Sound Inc. Also, Mr. Skinner was the founder of Kacee Exploration and the founder, President & CEO of Tiber Exploration Corp. He was first employee retained at Celtic Exploration Ltd. and has held other senior roles at Atlas Energy, Lasmos Canada Ltd., Dorchester Gas Corporation, Petromer Trend Corporation and Texaco Exploration Ltd.
Simon Akit — Director
Mr. Akit has over 22 years of oil & gas engineering and capital markets experience. He has been the Managing Director, Global Head Energy Sales at Canaccord Genuity since 2008. Previously, Mr. Akit was the Director of Institutional Equity Sales at BMO Capital Markets (New York), VP Intuitional Equity Sales at Raymond James Financial, Equity Research at UBS Securities. Prior to that, Mr. Akit was a drilling and completions engineer with EnCana Corporation.
Warren Brown — Director
Warren Brown is the Co-Founder, Vice President Corporate Development of White Owl and has served in increasingly senior and executive financial and accounting roles over the past 20 years, most recently the Vice President Finance and CFO of White Owl. Warren has experience in operational accounting, marketing, sales, investment banking and equity research in the oil and gas sector. He also has experience in corporate strategy, enterprise software and commodity market analysis. Warren has a Bachelor of Commerce degree from the University of Saskatchewan, is a CFA Charter holder and holds a CPA accounting designation.
Further details of the Proposed Transaction will be provided by way of a subsequent news release prior to Closing.
For further information contact:
All information contained in this news release with respect to Skyscape and Salida was supplied by the parties, respectively, for inclusion herein, and Skyscape and its directors and officers have relied on Salida for any information concerning such party.
Completion of the Qualifying Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange requirements, majority of the minority shareholder approval. Where applicable, the Qualifying Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Qualifying 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 Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this press release.
This news release contains forward-looking statements relating to the timing and completion of the Proposed Transaction, the future operations of the Company 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 the Company, 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 the Company'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 filings made by the Company with securities regulations.
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 the Company. As a result, the Company 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 the Company will update or revise publicly any of the included forward-looking statements as expressly required by Canadian securities law.
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