Montreal, Quebec--(Newsfile Corp. - January 25, 2023) - Meteorite Capital Inc. (TSXV: MTR.P) ("Meteorite") and Kobo Resources Inc. ("Kobo" and together with Meteorite, the "Companies") are pleased to announce that further to the news release dated January 17, 2023, the Companies have today entered into an engagement letter (the "Engagement Letter") with Leede Jones Gable Inc. (the "Agent"), pursuant to which the Agent and a syndicate of agents (collectively the "Agents") will act on behalf of the Companies on a commercially reasonable efforts basis to complete a private placement financing (the "Capital Raising Transaction") of subscription receipts (the "Subscription Receipts") at a price of $0.25 per Subscription Receipt for minimum aggregate proceeds of at least C$3,500,000 up to a maximum of $5,000,000 (or $5,750,000, assuming full exercise of the Agent's Option described below) on or prior to closing of the previously-announced proposed reverse takeover transaction pursuant to which Meteorite would acquire all of the securities of Kobo, with such transaction constituting Meteorite's "Qualifying Transaction" as such term is defined in Policy 2.4 - Capital Pool Companies (the "Policy") of the TSX Venture Exchange (the "TSXV") Corporate Finance Manual (the "QT").
Kobo intends to complete the QT of Meteorite, a capital pool company listed on the TSXV (TSXV: MTR.P), by way of a three-cornered amalgamation (the "Amalgamation") pursuant to which Meteorite will acquire all of the issued and outstanding common shares of Kobo ("Kobo Shares"), in exchange for post-Consolidation (as such term is defined below) common shares of Meteorite ("Resulting Issuer Common Shares") and Kobo shall amalgamate with a wholly-owned subsidiary of Meteorite, such that Kobo will be a wholly-owned subsidiary of Meteorite as it exists (the "Resulting Issuer") following the completion of the Amalgamation. Immediately prior to the Amalgamation, Meteorite shall have completed a consolidation of its issued and outstanding common shares (the "Consolidation") on the basis of 0.2 post-Consolidation Meteorite common shares (each a "Post-Consolidation Common Share") for every one (1) pre-Consolidation Meteorite common share held. The completion of the QT and Capital Raising Transaction shall be subject to the receipt of all necessary regulatory approvals and the other conditions listed in the Agency Agreement (as defined below).
Each Subscription Receipt will entitle the holder thereof to receive, without any further action by the holder of such Subscription Receipt or any additional consideration, and subject to adjustment, one unit (a "Unit") of the Resulting Issuer. Each Unit will be comprised of one Resulting Issuer common share issued on a post-Consolidation basis (the "Resulting Issuer Common Shares") and one half of one Resulting Issuer Common Share purchase warrant ("Warrant") entitling the holder to purchase, subject to adjustment, one Resulting Issuer Common Share at an exercise price of $0.40 for 24 months after the escrow release date set out in the agency agreement to be signed in respect of the Offering (the "Agency Agreement").
For the purposes hereof, Subscription Receipts issued by Kobo shall be referred to as "Kobo Subscription Receipts" and Subscription Receipts issued by Meteorite shall be referred to as "Meteorite Subscription Receipts".
Pursuant to the QT, if the escrow release conditions set out in the Agency Agreement have been satisfied prior to the escrow release deadline set out therein, the Kobo Subscription Receipts will be converted into Kobo Units (without payment by the holders of the Kobo Subscription Receipts of any additional consideration therefor) immediately prior to the completion of the QT and then the Kobo Common Shares will be exchanged for Post-Consolidation Common Shares, being Resulting Issuer Common Shares.
The Warrants and all other securities of Kobo that are exercisable for Kobo Shares will become exercisable for Resulting Issuer Shares.
If the escrow release conditions set out in the Agency Agreement have been satisfied prior to the Escrow Release Deadline set out below, the Meteorite Subscription Receipts will be converted into Units of the Resulting Issuer (without payment by the holders of the Meteorite Subscription Receipts of any additional consideration therefor). The Resulting Issuer securities issued in exchange for Meteorite Subscription Receipts will be subject to a trading restriction of four months and one day from the date of closing of the Capital Raising Transaction.
In the context of the Capital Raising Transaction, the Companies will grant the Agent an option to increase the size of the offering by up to 15%, exercisable in whole or in part at any time within 48 hours of the closing date of the Capital Raising Transaction (the "Agent's Option").
Upon fulfilment of all escrow release conditions described in the Agency Agreement, each Subscription Receipt will entitle the holder thereof to receive, without any further action by the holder of such Subscription Receipt or any additional consideration, and subject to adjustment, one Resulting Issuer Common Share and one-half of one Resulting Issuer Common Share Purchase Warrant.
Completion of the Capital Raising Transaction will be subject to the entering into by the Companies and the Agents of an agency agreement in respect of the Capital Raising Transaction (the "Capital Raising Agency Agreement"). The Capital Raising Agency Agreement will include the terms and conditions provided herein, industry standard covenants, representations and warranties and provisions regarding legal opinions, indemnification, contribution, termination clauses and other relevant matters as the Companies and the Agents may agree.
In consideration for the Agent's services with respect to the Capital Raising Transaction, the Companies shall (i) pay the Agents a cash fee of 6% of the aggregate gross proceeds of the Capital Raising Transaction (including the Agent's Option) (the "Agent's Cash Compensation"), and (ii) either Kobo or Meteorite shall issue warrants (the "Agent's Compensation Warrants") to purchase that number of Units of the respective Company equal to 6% of the quotient of the aggregate gross proceeds of the Capital Raising Transaction (including the Agent's Option) divided by $0.25 (the "Subscription Price"). Any Agent's Compensation Warrants issued by Kobo, shall be issued on the closing of the Capital Raising Transaction, while any Agent's Compensation Warrants issued by Meteorite shall be issued on a post-Consolidation basis by the Resulting Issuer on the closing of the QT. Each Agent's Compensation Warrant shall be exercisable at the Subscription Price for a period of 24 months. The number of Agent's Compensation Warrants and exercise price will be subject to adjustment to acquire common shares of the Resulting Issuer. The remuneration payable by Meteorite as the Agent's Cash Compensation will to be paid only at the closing of the QT.
The Companies shall pay the Agent (i) a cash corporate finance fee (the "Cash Corporate Finance Fee") which is equal to 2% of the gross amount of the Capital Raising Transaction plus applicable taxes, subject to a minimum Corporate Finance Fee of $75,000, plus applicable taxes, such minimum only effected in the event the Capital Raising Transaction is completed, and (ii) either Kobo and/or Meteorite shall issue warrants (the "Corporate Finance Compensation Warrants") to purchase that number of common shares of the respective Company equal to 2% of the quotient of the aggregate gross proceeds of the Capital Raising Transaction (including the Agent's Option) divided by the Subscription Price. The Corporate Finance Compensation Warrants issued by Kobo, shall be issued on the closing of the Capital Raising Transaction, while any Corporate Finance Compensation Warrants issued by Meteorite shall be issued on a post-Consolidation basis by the Resulting Issuer on the closing of the QT. The Corporate Finance Compensation Warrants shall otherwise have the same terms as the Agent's Compensation Warrants (collectively, the Agent's Cash Compensation, the Agent's Compensation Warrants, the Cash Corporate Finance Fee, and the Corporate Finance Compensation Warrants, the "Capital Raising Commission"). The remuneration payable by Meteorite as the Cash Corporate Finance Fee will to be paid only at the closing of the QT.
Notwithstanding the foregoing, the Companies shall be entitled to provide a President's List of subscribers (the "President's List") without limitation in aggregate subscriptions sold under the Capital Raising Transaction. The Companies will provide the Agent with the President's List for approval, such approval not to be unreasonably withheld. In respect of President's List subscriptions, the Agent's Cash Compensation shall be reduced to 2% of such gross proceeds and the Agent's Compensation Warrants shall be reduced to zero as it relates to such subscriptions.
The proceeds of the Capital Raising Transaction are expected to be used to fund (i) the exploration and other expenses relating to the Kossou Gold Project (as defined below), (ii) the expenses of the QT and the Capital Raising Transaction, and (iii) the working capital requirements of the Resulting Issuer.
Kobo was incorporated under the Business Corporations Act (Québec) on December 14, 2015 under the name 9333-9141 Québec Inc. On March 4, 2016, Kobo changed its name to Kobo Resources Inc.. Kobo's head office and registered office are located at 388 Grande-Allée East, Suite 101, Québec, Québec, G1R 2J4.
Kobo is a junior Canadian exploration and mining development company focused on acquiring, exploring and developing gold property assets located in West Africa and primarily in Côte d'Ivoire. Kobo, through its wholly-owned subsidiary, KOBO Ressources Côte d'Ivoire S.A., owns two research permits for gold (being the Kossou Permit and the Kotobi Permit) covering 449km2 and has three pending applications covering 1,068km2. As at the date hereof, Kobo's sole material asset is the Kossou Permit, which forms the basis of its Kossou gold project (the "Kossou Gold Project").
Meteorite exists under the provisions of the Canada Business Corporations Act with its registered and head office located at 1 Place Ville Marie, Suite 3900, Montreal, Québec. It is a capital pool company and intends for the QT to constitute its "Qualifying Transaction" as such term is defined in the Policy. Meteorite is a "reporting issuer" within the meaning of the Securities Act of each of the Provinces of British Columbia, Alberta, Ontario and Québec.
All information contained in this news release with respect to Meteorite and Kobo was supplied by the parties respectively, for inclusion herein, without independent review by the other party, and each party and its directors and officers have relied on the other party for any information concerning the other party.
For further information regarding the QT, please contact:
Charles R. Spector, Director, Meteorite Capital Inc.
Telephone: (514) 878-8847
Edouard Gosselin, Chief Executive Officer and Director, Kobo Resources Inc.
Completion of the Capital Raising Transaction and the QT is subject to a number of conditions, including but not limited to, TSXV acceptance. Where applicable, the QT cannot close until the required shareholder approval is obtained. There can be no assurance that the Capital Raising Transaction and the QT 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 QT, any information released or received with respect to the QT 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 TSXV has in no way passed upon the merits of the proposed Capital Raising Transaction or the proposed QT and has neither approved nor disapproved the contents of this press release.
NEITHER THE TSXV NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSXV) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION:
This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate, among other things, to: the terms and conditions of the proposed QT; the terms and conditions of the proposed Capital Raising Transaction; use of funds; and the business and operations of the Resulting Issuer after the proposed QT. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; and the delay or failure to receive board, shareholder or regulatory approvals. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, Meteorite and Kobo assume no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.
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