YUKOTERRE RESOURCES INC. (“
Yukoterre”) (CSE:YT),
is pleased to announce that further to the press release dated June
17, 2020, it has entered into an amalgamation agreement dated
August 25, 2020 with FlyOverture Equity Inc., operating as Silo
Wellness (“
Silo”), and 1261466 BC Ltd.
(“
Yukoterre Subco”), a wholly-owned subsidiary of
Yukoterre (the “
Amalgamation Agreement”).
Completion of the transactions contemplated in the Amalgamation
Agreement will result in the reverse takeover of Yukoterre by Silo
(the “
Proposed Transaction”). The Proposed
Transaction will constitute a “Fundamental Change” of Yukoterre, as
defined by the policies of Canadian Securities Exchange (the
“
CSE”).
Overview of Silo
Silo, with an Oregon, Toronto, and Jamaica-based
team, has been in the psychedelics and functional mushroom space
since 2018 and ultimately formulated and announced a patent-pending
psilocybin nasal spray in Jamaica in 2019. In addition to its IP
portfolio, Silo is focusing on consumer product and wellness
center/retreat brand development for psychedelic and functional
mushrooms. Its go-to-market revenue strategy includes scaling its
United States Silo Reboot brand of functional mushrooms (via
www.SiloReboot.com), its magic mushroom cultivation in Jamaica, and
its psychedelic retreat offerings in Jamaica (psilocybin) and
Oregon (ketamine-assisted psychotherapy wellness retreats) (via
www.SiloRetreats.com). Following the Proposed Transaction, the
Resulting Issuer (defined below) will carry on the business of
Silo, which Silo anticipates will involve continuing to grow its
operations organically and strategically integrating complementary
businesses to its operations.
The Proposed Transaction
Pursuant to the Amalgamation Agreement,
Yukoterre and Silo will complete a three-cornered amalgamation in
accordance with the provisions of the Business Corporations Act
(British Columbia), which will involve Yukoterre Subco amalgamating
with Silo to form a single, wholly-owned subsidiary of Silo
Wellness Inc., the resulting issuer post-closing of the Proposed
Transaction (the “Resulting Issuer”).
In connection with the Proposed Transaction,
Yukoterre proposes to complete a consolidation of its issued and
outstanding common shares on the basis of one half (0.50) of a
post-Consolidation Yukoterre Share for every one (1)
pre-Consolidation Yukoterre Share held, subject to the receipt of
approval from its shareholders (the
“Consolidation”). Yukoterre also intends to change
its name to “Silo Wellness Inc.” (the “Name
Change”) and to reconstitute its board of directors and
management team as described below under “Proposed Management Team
and Board of Directors of the Resulting Issuer.”
Pursuant to the Amalgamation Agreement, upon
closing of the Proposed Transaction:
- The shareholders of Silo (the
“Silo Shareholders”), other than the Silo
Shareholders who exercise their dissent rights, will receive one
common share of the Resulting Issuer for each Silo Share (as
defined below) held;
- The Yukoterre Shareholders (as
defined below), other than the Yukoterre Shareholders who exercise
their dissent rights, will receive one common share of the
Resulting Issuer for each Yukoterre Share held
(post-Consolidation);
- All outstanding stock options of
Yukoterre will be exchanged for stock options of the Resulting
Issuer, on equivalent terms after having given effect to all of the
transactions contemplated by the Proposed Transaction; and
- Silo will be a wholly-owned
subsidiary of the Resulting Issuer.
Upon completion of the Proposed Transaction,
assuming completion of the Consolidation and the Concurrent
Financing (as defined below), former Silo Shareholders will hold,
in the aggregate, approximately 35,066,730 common shares (the
“Resulting Issuer Shares”) in the capital of the
Resulting Issuer representing approximately 86.9% of the
outstanding Resulting Issuer Shares and existing holders of
Yukoterre Shares (the “Yukoterre Shareholders”)
will hold, in the aggregate, approximately 5,260,270 Resulting
Issuer Shares, representing approximately 13.1% of the outstanding
Resulting Issuer Shares.
The completion of the Proposed Transaction is
subject to the satisfaction of various conditions, including but
not limited to: (i) the approval of the listing of the Resulting
Issuer Shares on the CSE; (ii) the disposition by Yukoterre of its
mining assets; (iii) the approval of the Consolidation, the
Amalgamation Agreement, the Name Change and the reconstitution of
Yukoterre’s board of directors by the requisite majority of
Yukoterre Shareholders; (iv) completion of the Concurrent
Financing; (v) the approval of the Amalgamation by the requisite
majority of Silo Shareholders; and (vi) other conditions customary
for a transaction of this nature.
The parties anticipate that, upon satisfaction
of the CSE’s initial listing requirements and approval by the CSE,
the common shares of the Resulting Issuer will begin trading on the
CSE following the closing of the Proposed Transaction. There is no
guarantee that the Resulting Issuer will meet the listing
requirements or that the CSE will approve the Resulting Issuer for
listing.
The common shares of Yukoterre have been halted
since June 17, 2020 and may remain halted until the completion of
the Proposed Transaction. There can be no assurance that the
Proposed Transaction will be completed on the terms proposed or at
all.
Summary of the Concurrent
Financing
In connection with the Proposed Transaction,
Silo plans to complete a “best-efforts” private placement of
subscription receipts of Silo (the “Subscription
Receipts”) to raise a minimum of $2.5 million (the
“Concurrent Financing”). The gross proceeds of the
Concurrent Financing, less any cash commission and offering
expenses, will be deposited in escrow on the closing date of the
Concurrent Financing until the satisfaction of certain release
conditions, including that all conditions precedent to the Proposed
Transaction have been met (the “Release
Conditions”).
Upon the satisfaction of the Release Conditions,
each Subscription Receipt will be converted into one common share
in the capital of Silo (a “Silo Share”) without
payment of any additional consideration or further action on the
part of the holder thereof. At the effective time of the Proposed
Transaction, each Silo Share will be exchanged for one Resulting
Issuer Share.
“We are excited to hit this key milestone on our
way to a public listing,” said Jamaica based Silo Chief Executive
Officer, Douglas Gordon. “Our team has worked diligently to get us
to this point and we welcome the opportunity to develop the
business in line with our operational objectives and our
post-public growth strategy.”
Further Information
Further details about the Proposed Transaction
and the Resulting Issuer will be provided in a CSE listing
statement to be prepared and filed by Yukoterre in respect of the
Proposed Transaction.
Investors are cautioned that, except as
disclosed in the CSE listing statement (or other disclosure
document prepared by Yukoterre) in connection with the Proposed
Transaction, any information released or received with respect to
the Proposed Transaction may not be accurate or complete and should
not be relied upon.
The CSE 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 Silo and Yukoterre was supplied
by each party respectively for inclusion herein and each party has
relied on the accuracy of such information without independent
verification.
About Yukoterre
Yukoterre is engaged in the business of mineral
exploration and the acquisition of mineral property assets in the
Yukon Territory. Its objective is to locate and develop mineral
properties of merit and to conduct its exploration program on the
Division Mountain Property.
About Silo
The mission of Silo is to improve health and
wellness by developing and introducing psychedelic medicine to
reduce trauma and increase performance by destigmatizing the active
compounds in psychedelics and innovating ease of administration and
ingestion. Silo intends to introduce new, safe, and affordable
alternatives to current medicines by facilitating entry into new
and emerging markets where psychedelics are legal by conducting
wellness retreats and elsewhere by manufacturing and distributing
functional mushrooms.
Since inception, Silo’s activities have focused
on: (1) development of an e-commerce online sales platform located
at www.SiloReboot.com for legal functional mushroom
tinctures; (2) establishment of supply chain, extraction, bottling,
packaging, order fulfillment relationships and infrastructure for
legal functional mushroom tinctures; (3) establishing an inventory
of products to be sold online; (4) branding through viral organic
social media coverage; (5) development and formulation of the
psilocybin nasal spray; (6) managing IP related to its psilocybin
nasal spray via the filing of provisional and
non-provisional patent applications; (7) development of Jamaican
psilocybin retreat infrastructure and online marketing platform for
the same through www.SiloRetreats.com; and (8) development of
a legal Ketamine-assisted psychotherapy nature retreat in the State
of Oregon (https://siloretreats.com/ketamine-retreat).
Further Information
For further information, please contact:
Yukoterre Resources Inc.Kenny ChoiChief
Executive OfficerTel: (416) 861-2262E-mail:
Kenny.choi@fmresources.ca
Silo Mo Yang Chief Operations Officer Tel: 541-525-9190 Web:
www.SiloWellness.com E-mail: mo.yang@silowellness.com
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 Concurrent
Financing, the Proposed Transaction and the proposed annual general
and special meeting of shareholders of Yukoterre and the items of
business thereunder. 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.
Readers should not place undue reliance on the
forward-looking statements and information contained in this news
release. Yukoterre assumes no obligation to update the
forward-looking statements of beliefs, opinions, projections, or
other factors, should they change, except as required by law.
This news release does not constitute an offer
to sell, or a solicitation of an offer to buy, any securities from
Silo in the United States. The securities have not been and will
not be registered under the United States Securities Act of 1933,
as amended (the “U.S. Securities Act”) or any state securities laws
and may not be offered or sold within the United States or to U.S.
Persons unless registered under the U.S. Securities Act and
applicable state securities laws or an exemption from such
registration is available.
Yukoterre Resources (CSE:YT)
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