PesoRama and Skyscape Capital Enter into Letter of Intent for Qualifying Transaction
Toronto, Ontario--(Newsfile Corp. - December 10, 2020) - PesoRama Inc. ("PesoRama" or the "Company") announced today that, after a proxy contest, all directors nominated by a group of shareholders (the "Concerned Shareholders") led by The Ocean View Trust, a family trust of Rahim Bhaloo, the founder, a director and now the Executive Chairman of PesoRama, together with 2110958 Alberta Ltd., a company controlled by Mr. Bhaloo, were elected to the board of directors of PesoRama, replacing the nominees proposed by PesoRama's previous management. In addition, PesoRama announces that it has entered into a letter of intent with Skyscape Capital Inc. to complete a business combination transaction.
Dissidents Prevail in Proxy Contest
The Concerned Shareholders of PesoRama have triumphed in their efforts to defeat the directors nominated for re-election by PesoRama's outgoing directors at PesoRama's annual general and special meeting (the "Meeting") of shareholders held on December 9, 2020.
Following the Meeting, PesoRama and the Concerned Shareholders reached an agreement on the senior leadership of PesoRama going forward. In accordance with the agreement, Rahim Bhaloo and Edward Sivitilli will continue to serve as directors of the Company. Mr. Bhaloo will also serve as Executive Chairman and Mr. Sivitilli will remain in his role as Chief Executive Officer of PesoRama. PesoRama's operations will continue to be carried out by its current team under Mr. Sivitilli's supervision.
In addition, Andrew Parks has been appointed as an independent director of PesoRama. Mr. Parks is currently the CEO and director of Fountain Asset Corp., which is a merchant bank listed on the TSX Venture Exchange. He is currently a director of The BRN Group, which provides total brand management services and expertise to the global cannabis industry. Mr. Parks has over 10 years of experience in capital markets. Prior to joining Fountain Asset Corp. in 2017, he was a partner and registered portfolio manager at a successful Toronto-based asset manager. Mr. Parks is a Chartered Financial Analyst and holds an Honours Bachelor of Business Administration from Wilfrid Laurier University.
Rahim Bhaloo, Executive Chairman and Ed Sivitilli, Chief Executive Officer of PesoRama stated, "We would like to thank our shareholders for their support and together, we look forward to leading PesoRama to success and establishing it as Mexico's leading dollar store chain."
Results of AGM
Prior to the Meeting, Charles Wachsberg, Allan White, Andrew Taylor and Robb McNaughton resigned as directors of the Company.
At the Meeting, Mr. Bhaloo, Stephen Rosenberg, Josef Arfin, Chris Irwin and Eric Lowy were elected as directors of the Company, as proposed by the Concerned Shareholders. In order to give effect to the agreement on the leadership of the Company, following the Meeting, Messrs. Rosenberg, Arfin, Irwin and Lowy resigned, and Mr. Sivitilli and Mr. Parks were appointed, as directors of PesoRama. After giving effect to these changes, the board of directors of PesoRama now consists of Mr. Bhaloo, Mr. Sivitilli and Mr. Parks.
Also at the Meeting, MNP LLP, Chartered Professional Accountants, was reappointed as auditors of PesoRama, the resolution to fix the number of directors of the Company at five directors was approved and the resolution to amend the by-laws of the Company was defeated.
Letter of Intent with Skyscape Capital Inc.
PesoRama has entered into a letter of intent (the "LOI") dated December 10, 2020 with Skyscape Capital Inc. ("Skyscape"), a capital pool company as defined under TSX Venture Exchange ("TSXV" or the "Exchange") Policy 2.4 - Capital Pool Companies ("Policy 2.4"), whereby Skyscape and PesoRama will complete an arrangement, amalgamation, share exchange, or similar transaction to ultimately form the resulting issuer (the "Resulting Issuer"), which will continue to carry on the business of PesoRama (the "Transaction"). It is intended that the Transaction will constitute Skyscape's Qualifying Transaction, as such term is defined in the policies of the Exchange.
Skyscape completed its initial public offering in March, 2018. The common shares of Skyscape (the "Skyscape Shares") are listed for trading on the TSXV under the stock symbol "SKY.P". Skyscape has no commercial operations and has no assets other than cash. Skyscape was incorporated under the laws of the Province of Ontario.
In connection with the LOI, on November 2, 2020, Skyscape entered into a letter of intent with Fundamental Private Markets ("Fundamental"), which contemplated that Fundamental and certain other investors would provide financing to Skyscape and to PesoRama in connection with the Transaction. Under the terms of the letter of intent, it is proposed that Fundamental would participate in financings of PesoRama and Skyscape for aggregate gross proceeds of $19,250,000 and not less than $9,250,000 in connection with the proposed business combination between PesoRama and Skyscape.
On completion of the Transaction, the board of directors of the Resulting Issuer would consist of five directors, two of whom would be nominated by Fundamental, two of whom would be nominated by PesoRama (being Rahim Bhaloo and Edward Sivitilli) and one of which would be nominated by Skyscape.
The LOI was negotiated at arm's length. The terms and conditions outlined in the LOI are non-binding on the parties and the LOI is expected to be superseded by a definitive agreement (the "Definitive Agreement") to be negotiated between the parties. Completion of the Transaction will be subject to a number of conditions, including but not limited to, the satisfactory completion of due diligence by the parties, the approval of the TSX Venture Exchange, obtaining all required approvals of the directors of Skyscape and PesoRama and PesoRama's shareholders, completion of a concurrent financing, and other customary conditions. There can be no assurance that the Transaction will be completed as proposed or at all.
The TSXV has in no way passed upon the merits of the Transaction and has neither approved nor disapproved the contents of this press release.
General Information about PesoRama
PesoRama is a single price point Mexican dollar store retailer offering a broad assortment of consumable products, general merchandise and seasonal items.
Additional Information
For further information please contact:
PesoRama Inc.
Edward Sivitilli, Director and CEO
Telephone: 416-606-5002
Forward-Looking Statements
This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws, including, without limitation, the Concerned Shareholders' and PesoRama's respective priorities, plans and strategies. All statements and information, other than statements of historical fact, included herein are forward-looking statements, including, without limitation, statements regarding activities, events or developments that the Concerned Shareholders expect or anticipate may occur in the future. These forward-looking statements can be identified by the use of forward-looking words such as "may", "will", "expect", "intend", "plan", "estimate", "anticipate", "believe" or "continue" or similar words and expressions or the negative thereof. Such statements reflect the Concerned Shareholders' or the Concerned Shareholder nominees' current views and intentions with respect to future events and are subject to certain risks, uncertainties and assumptions. There can be no assurance that the plans, intentions or expectations upon which these forward-looking statements are based will occur or, even if they do occur, will result in the performance, events or results expected. We caution readers not to place undue reliance on forward-looking statements contained herein, which are not a guarantee of performance, events or results and are subject to a number of risks, uncertainties and other factors that could cause actual performance, events or results to differ materially from those expressed or implied by such forward-looking statements. These factors include: changes in PesoRama's and the Concerned Shareholders' strategies, plans or prospects; general economic, industry, business, regulatory and market conditions; actions of PesoRama and its competitors; risks relating to government regulation and changes thereto; and the state of the economy including general economic conditions globally and economic conditions in the jurisdiction in which PesoRama's operates. These factors should not be construed as exhaustive. Readers are cautioned that all forward-looking statements involve known and unknown risks and uncertainties. We urge you to carefully consider those risks and uncertainties. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. Unless expressly stated otherwise, the forward-looking statements included herein are made as of the date of this news release and the Concerned Shareholders disclaim any obligation to publicly update such forward-looking statements, except as required by applicable law.
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