131 and Syntheia Announce Signing of Amended and Restated Definitive Agreement and Private Placement of up to $3,500,000
- Written by Newsfile
April 12, 2024 4:08 PM EDT | Source: 1319472 B.C. Ltd.[1]
Toronto, Ontario--(Newsfile Corp. - April 12, 2024) - 1319472 B.C. Ltd. ("131") and MetaWorld Corporation, doing business as Syntheia ("Syntheia") are pleased to announce the execution of an amended and restated letter agreement (the "Amended Letter Agreement") which, subject to certain conditions and applicable shareholder and regulatory approvals, will result in a reverse takeover of 131 by Syntheia (the "Proposed Transaction"). The resulting issuer from the Proposed Transaction (the "Resulting Issuer") will continue to operate the business of Syntheia.
About Syntheia
Syntheia is an early-stage artificial intelligence technology company, channeling its efforts into refining and expanding its proprietary, conversational AI-based platform (the "Syntheia AI Platform"). The Syntheia AI Platform represents the integration of natural language processing ("NLP") technology, enabling it to not only understand but also respond to human language with accuracy. The Syntheia AI Platform, a generative, AI-powered algorithm equipped with a human-like voice, boasts self-learning capabilities derived from NLP methodologies. Currently in beta testing, the Syntheia AI Platform is crafted to offer a suite of automated solutions, particularly for retail-focused businesses where customer interaction and service are key to operations. At the heart of the Syntheia AI Platform is its use of AI to emulate human cognitive processes, combined with a sophisticated large language model, which is integral for interpreting and generating human-like language responses.
The Amended Letter Agreement
Under the terms of the Amended Letter Agreement, the Proposed Transaction will be completed by way of an amalgamation, arrangement, share exchange or other similarly structured transaction whereby a subsidiary of 131 and Syntheia will amalgamate pursuant to the laws of the Province of Ontario, with the amalgamated corporation surviving as a wholly owned subsidiary of 131. In connection with the Proposed Transaction, 131 will reconstitute its board of directors and change its name to "Syntheia Corp." or such other similar name as may be accepted by the relevant regulatory authorities (the "Name Change") and the Resulting Issuer will conduct its business under the new name.
The Amended Letter Agreement includes a number of conditions, including but not limited to, requisite shareholder approvals including the approval of the shareholders of Syntheia, the completion of the Financing (as defined below), the split of 131's common shares in a ratio that results in 12,500,000 common shares of 131 (the "Split"), the issuance of post-Split 131 common shares to holders of Syntheia common shares (the "Syntheia Shares") on a 1:1 basis, approvals of all regulatory bodies having jurisdiction in connection with the Proposed Transaction, and other closing conditions customary to transactions of the nature of the Proposed Transaction.
131 is a reporting issuer under the securities laws of the Provinces of British Columbia and Alberta. 131's common shares are currently not posted for trading on any marketplace. 131 has applied to list the Resulting Issuer's common shares on Cboe Canada Inc. (the "Exchange") and, if and upon the satisfaction of the Exchange's initial listing requirements, the common shares of the Resulting Issuer are expected to begin trading on the Exchange following the closing of the Proposed Transaction.
Investors are cautioned that, except as disclosed in the filing statement to be prepared 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. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.
Pursuant to the terms of the Amended Letter Agreement, and in connection with the Proposed Transaction:
holders of Syntheia Shares will receive one (1) fully paid and non-assessable post-Split Resulting Issuer shares for each Syntheia Share held; and
all outstanding warrants, broker warrants and options to purchase Syntheia Shares will be exchanged on an equivalent basis for options, warrants and broker warrants to purchase post-Split common shares of the Resulting Issuer.
Subscription Receipt Financing
In connection with the Proposed Transaction, 131 and Syntheia announce today the launch of a private placement brokered offering of a minimum of 7,428,571 and a maximum of 10,000,000 subscription receipts (each a "Subscription Receipt") at a price of $0.35 for aggregate gross proceeds of up to $3,500,000 (the "Financing"). In addition to the number of Subscription Receipts sold in the Financing, the Agents (as defined below) will have an over-allotment option to arrange for the sale of an additional 20% of the total number of Subscription Receipts sold in the Financing. Upon the satisfaction or waiver of, among other things, all of the condition precedents to the completion of the Proposed Transaction, each Subscription Receipt will be exchanged for one unit of Syntheia (a "Unit") with each Unit being comprised of one (1) common share of Syntheia (a "Syntheia Share") and one (1) common share purchase warrant of Syntheia (a "Syntheia Warrant"). Each Syntheia Warrant will be exercisable for one Syntheia Share at an exercise price of $0.50 for a period of 24 months following the date that the Resulting Issuer shares begin trading on the Exchange. Upon closing of the Proposed Transaction, the Syntheia Shares and Syntheia Warrants will be exchanged for post-Split Resulting Issuer shares and Resulting Issuer warrants on economically equivalent terms on a 1:1 basis. The Syntheia Warrants are subject to acceleration at Syntheia's option, if at any time prior to the expiry of the Syntheia Warrants the 10-day volume-weighted average price of the Resulting Issuer shares is greater than $0.75, provided that: (i) the Resulting Issuer disseminates a press release providing notice of its intention to accelerate the expiry of the Syntheia Warrants, and (ii) the accelerated expiry date of the Syntheia Warrants falls on the earlier of (unless exercised by the holder prior to such date): the 30th day after the date of dissemination of such press release, and/or 24 months following the listing of the Resulting Issuer shares on the Exchange.
The Financing will be brokered by First Republic Capital Corp. as lead agent (the "Lead Agent") and Hampton Securities Ltd. (together with the Lead Agent, the "Agents"). At the closing of the Financing, Syntheia shall pay to the Agents a fee (the "Commission") comprised of: (a) a corporate finance fee equal to 2.0% of the gross proceeds of the Subscription Receipts sold pursuant to the Financing payable to the Lead Agent (the "Corporate Finance Fee"); (b) a cash fee equal to 6.0% of the gross proceeds raised from subscriptions in the Financing from persons who participate in the Financing that were introduced to Syntheia by each Agent (the "Commission", together with the Corporate Finance Fee, the "Cash Compensation"), payable to the Agents as applicable; (c) corporate finance warrants (the "Corporate Finance Warrants") issued by Syntheia equal to 2.0% of the total number of Subscription Receipts sold pursuant to the Financing, issuable to the Lead Agent (d) compensation warrants (the "Compensation Warrants", together with the Corporate Finance Warrants, the "Agent's Warrants") issued by Syntheia equal to 6.0% of the total number of Subscription Receipts issued to persons who participate in the Financing that were introduced to Syntheia by each Agent, issuable to the Agents as applicable. Each Agent's Warrant shall entitle the holder to subscribe for one Unit at $0.35 for a period for twenty-four (24) months from the date that the Resulting Issuer's common shares commence trading on the Exchange.
Fifty percent of the Cash Compensation and the Agent's expenses up to the closing date of the Financing (the "Closing Date") shall be paid to the Agents on the Closing Date. The remaining 50% of the Cash Compensation shall be deposited into escrow on the Closing Date and released upon satisfaction of the escrow release conditions of the Financing and the release of the escrowed funds raised in the Financing, together with any interest earned thereon.
The net proceeds from the Financing will be used by the Resulting Issuer for operational expansion, business development and working capital purposes.
Management of the Resulting Issuer
Subject to applicable shareholder and Exchange approval, upon completion of the Proposed Transaction, the board of directors and management of the Resulting Issuer will be comprised of the following individuals:
Tony Di Benedetto, Age 52, Chief Executive Officer and Chairman
Mr. Tony Di Benedetto is the Chairman and CEO of the Resulting Issuer. Mr. Di Benedetto is a Canadian technology entrepreneur with over 30 years of hands-on experience in building, operating, and divesting technology companies. Most recently, Mr. Di Benedetto was the co-founder of Drone Delivery Canada (TSXV: FLT), which he took public and successfully raised over $120M in equity financing, achieving market capitalization in excess of $550M. Mr. Di Benedetto has also co-founded several technology companies including Data Centers Canada – a colocation data center facility in Vaughan, Ontario – which he later sold to Terago Networks (TSX: TGO). Other technology enterprises Di Benedetto developed include system integration/managed services businesses, hosting, and one of southern Ontario's largest fixed wireless broadband networks, all of which he successfully divested. Mr. Di Benedetto holds a degree from York University.
Mr. Di Benedetto will devote such time as is necessary and appropriate to the business of the Resulting Issuer to effectively fulfill his duties as Chairman and CEO, which is estimated to be approximately 80% of his time.
Richard Buzbuzian, Age 53, President and Director
Richard Buzbuzian is a director of Resulting Issuer. Mr. Buzbuzian is a capital markets executive with over 25 years of investment experience in Canada and Europe. Most recently, Mr. Buzbuzian was president and a director of Drone Delivery Canada (TSXV: FLT), which he cofounded, took public, and raised over $120M Canadian in equity financings, achieving market capitalization in excess of $550M. Mr. Buzbuzian holds a degree from the University of Toronto.
Mr. Buzbuzian will devote such time as is necessary and appropriate to the business of the Resulting Issuer to effectively fulfill his duties as Director, which is estimated to be approximately 80% of his time.
Paul Di Benedetto, Age 48, Chief Technology Officer
Mr. Paul Di Benedetto is the Chief Technology Officer of the Resulting Issuer. Paul has co-founded a number of technology companies in the Canadian marketplace and has led the technology oversight roles in each of these entities. Paul is instrumental in implementing technology structures which maximize organizational growth with a view of maximizing return on investments for all stakeholders. Paul brings over 20 years of technology architecture and engineering expertise to the Resulting Issuer's management team.
Veronique Laberge, Age 41, Chief Financial Officer
Ms. Veronique Laberge is the CFO of the Resulting Issuer. Ms. Laberge is a chartered professional accountant and holder of the title of auditor. With more than 17 years of experience in professional practice, she is specialized in certification mandates, general accounting and as a consultant for public and private companies.
Chris Irwin, Age 55, Director
Mr. Chris Irwin is a director of the Resulting Issuer. Mr. Irwin practices securities and corporate/commercial law and has been the managing partner of Irwin Lowy LLP since January 2010; prior thereto he was the President of Irwin Professional Corporation from August 2006 to December 2009; and prior thereto he was an associate at Wildeboer Dellelce LLP from January 2004 to July 2006. Mr. Irwin advises a number of public companies, board of directors and independent committees on a variety of issues. Mr. Irwin is a director and/or officer of a number of public companies. Mr. Irwin is a former Director of Trelawney Mining and Exploration Inc., a company acquired by IAMGOLD Corporation in a $608 million transaction; former Director of Southern Star Resources Inc., which was formerly listed on TSX prior to becoming Gold Eagle Mines Ltd. and being acquired by Goldcorp Inc. in a $1.5 billion transaction; a former director of Jerritt Canyon Canada Ltd., which was acquired by First Majestic Silver Corp. in a $500 million transaction; and a former officer of Mindset Pharma Inc., a company acquired by Otsuka Pharmaceutical Co., Ltd., in a $85 million transaction.
Rob Montemarano, Age 53, Director
Mr. Montemarano is a director of the Resulting Issuer. Mr. Montemarano is currently the Vice-President of Lakeview Homes Inc., a residential property development and construction company. Mr. Montemarano has been involved in corporate and project financing activities in real estate, and a variety of other industries. He was formerly a director of Drone Delivery Canada Corp. (TSXV: FLT) from 2012 to November 2020 and was formerly a director and member of the audit committee for Goldstone Resources Inc. (TSX: GRC) (formerly Ontex Resources Ltd.) from September 1995 to December 2009. He was also a director of Leader Capital Corp. (TSXV: LDR) from August 1998 to August 2000, a director of Foundry Holdings Corp. from 2000 to 2003 (TSXV: FDY), and a director of Global Net Entertainment from 2000 to 2003 (TSXV: GET).
Steven Silvestro, Age 53 , Director
Mr. Silvestro is a director of the Resulting Issuer. Mr. Silvestro, a Chef Consultant, is a veteran in corporate and consulting roles in the hospitality industry. With a culinary background, Mr. Silvestro has 30 years of industry experience in restaurant operations, menu, recipe creation, inventory and costing. As a Corporate Chef at SIR Corp., Steven oversaw and contributed to the development and execution of new brands across multiple locations throughout his tenure at SIR Corp.
Additional Information
All information contained in this press release with respect to 131 and Syntheia was supplied by the parties respectively, for inclusion herein, and each party and its directors and officers have relied on the other party for any information concerning the other party.
The common shares of 131 have not been and will not be registered under the United States Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Cboe Canada Inc. has not reviewed or approved any of the contents of this news release.
For additional information on 131:
Binyomin PosenChief Executive Officer & DirectorTelephone: 416-481-2222Email: bposen@plazacapital.ca [2]
For additional information on Syntheia:
Tony Di BenedettoChief Executive Officer and ChairmanTelephone: 416-791-9399Email: tony@launchcapital.ca [3]
About 131
131 Resources Inc. has no current activities or operations and is not currently listed on a stock exchange.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of Canadian securities laws and financial outlook (collectively, "forward-looking information"). Statements containing the words "believe", "expect", "intend", "should", "seek", "anticipate", "will", "positioned", "project", "risk", "plan", "may", "estimate", or, in each case, their negative and words of similar meaning, are intended to identify forward-looking information. Forward-looking information in this news release, which includes, but is not limited to, information relating to Syntheia's business objectives and milestones and the anticipated timing of, and costs in connection with, the execution or achievement of such objectives and milestones, including the launch of Syntheia's beta NLP, Syntheia's future growth prospects and intentions to pursue one or more viable business opportunities; the development of Syntheia's business and future activities; expectations relating to market size and anticipated growth; expectations with respect to economic, business, regulatory and/or competitive factors related to Syntheia or industry generally; the market for Syntheia's current and proposed product offerings, as well as Syntheia's ability to capture market share; Syntheia's strategic investments and capital expenditures, and related benefits; the distribution methods expected to be used by Syntheia to deliver its product offerings; the competitive landscape within which Syntheia operates and Syntheia's market share or reach; Syntheia making meaningful increases to its revenue profile; Syntheia continuing to increase its revenue; Syntheia's ability to generate cash flow from operations and from financing activities; Syntheia's ability to obtain, maintain, and renew or extend, applicable authorizations, including the timing and impact of the receipt thereof; Syntheia hitting its anticipated sales from continuing operations; Syntheia hitting its forecasted revenue, customer acquisition and sales projections; the performance of Syntheia's business and the operations and activities of Syntheia; the intention of Syntheia to complete the financing and any additional offering of securities of Syntheia and the aggregate amount of the total proceeds that Syntheia will receive pursuant to the current financing and/or any future offering; Syntheia's expected use of the net proceeds from the current financing and/or any future offering; Syntheia closing on the entire current financing; and Syntheia applying and receiving any required approvals from the Exchange in relation to the listing of its common shares in the expected timeframe.
Forward-looking statements are subject to the assumptions used in the preparation for such forward-looking statements, which include, but are not limited to, the assumptions that: current and future members of management will abide by Syntheia's business objectives and strategies as established by Syntheia; Syntheia will retain and supplement its board of directors, advisory board and management, or otherwise engage consultants and advisors having knowledge of the industries (or segments thereof) within which Syntheia may from time to time participate; Syntheia will have sufficient working capital and the ability to obtain the financing required in order to develop and continue its business and operations; Syntheia will continue to attract, develop, motivate and retain highly qualified and skilled consultants and/or employees, as the case may be; no adverse changes will be made to the regulatory framework governing applicable matters in the jurisdictions in which Syntheia conducts business and any other jurisdiction in which Syntheia may conduct business in the future; Syntheia will be able to generate cash flow from operations; Syntheia will be able to execute on its business strategy as anticipated, which includes the onboarding of some or all of the customers for which they have commenced preliminary discussions with; Syntheia will be able to meet the requirements necessary to obtain and/or maintain authorizations required to conduct the business; general economic, financial, market, regulatory, and political conditions, including the impact of the COVID-19 pandemic, will not negatively affect Syntheia or its business; Syntheia will be able successfully complete its patent application and secure its proprietary technology and intellectual property; Syntheia will be able to successfully compete in the industry; Syntheia will be able to effectively manage anticipated and unanticipated costs; Syntheia will be able to maintain internal controls over financial reporting and disclosure, and procedures in order to ensure compliance with applicable laws; Syntheia will be able to conduct its operations in a safe, efficient and effective manner; general market conditions will be favourable with respect to Syntheia's future plans and goals; future pricing of Syntheia's products; Syntheia will reach the anticipated sales from continuing operations; Syntheia will complete the Financing; Syntheia's will use of the net proceeds from the Financing and/or any future offering as outlined herein; Syntheia will hit its forecasted revenue and sales projections; Syntheia will make meaningful increases to its revenue profile; Syntheia will continue to increase its revenue; Syntheia closing on the entire Financing, and Syntheia applying and receiving any required approvals from the Exchange in relation to the listing of its common shares in the expected time frame. Although considered reasonable by management of Syntheia at the time of preparation, these assumptions may prove to be imprecise and result in actual results differing materially from those anticipated, and as such, undue reliance should not be placed on forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by the forward-looking information. Such risks and uncertainties include, but are not limited to, Syntheia's inability to attract and retain qualified members of management and board of directors and advisors to grow Syntheia's business and its operations; unanticipated changes in economic and market conditions or in applicable laws; the impact of the publications of inaccurate or unfavourable research by analysts or other third parties; Syntheia's failure to complete future acquisitions and/or enter into strategic business relationships; Syntheia's failure to formally enter into formal agreements with potential clients or customers; unanticipated changes in the industry in which Syntheia may from time to time conduct its business and operations, including Syntheia's inability to respond or adapt to such changes; Syntheia's inability to secure or maintain favourable strategic partnerships or to receive the required authorizations necessary to conduct the business and operations and meet its targets; Syntheia's inability to secure desirable partnership agreements on favourable terms; risks relating to projections of Syntheia's operations; Syntheia's inability to effectively manage unanticipated costs and expenses; risk of shortages of skilled labor; risk of loss of intellectual property and proprietary technology rights; risks that Syntheia may not expand its product portfolio past its current contemplated product offering; Syntheia's failure to utilize the use of proceeds from the Financing and/or any future offering as expected and/or disclosed; risk that Syntheia will not reach the anticipated sales from continuing operations; risk that Syntheia will not hit its forecasted revenue and sales projections; risk that Syntheia will be unable to increase its revenue profile and that it will decease and/or plateau; risk that Syntheia will be unable to close on the entire Financing; and risks that Syntheia will be unable to receive the required approval from the Exchange in relation to the listing of its common shares within the set timeframe or at all. The foregoing list of factors that may affect future results is not exhaustive. There may be other factors and risks that cause actions, events or results not to be as anticipated, estimated or intended. These risks, uncertainties, and assumptions could adversely affect the outcome of the plans and events described herein. These factors should be considered carefully, and readers are cautioned not to place undue reliance on such forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. The forward-looking statements are based upon management's beliefs and assumptions and are made as of the date of this news release. In light of the significant uncertainties inherent to the forward-looking statements included in this news release, the inclusion of such information should not be regarded as a representation or warranty by Syntheia or any other person that Syntheia's objectives and plans will be achieved in any specified timeframe, if at all. Readers are cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or upon which they are placed will occur. Except to the extent required by applicable laws or rules, Syntheia undertakes no obligation to update or revise any forward-looking statements included in this news release.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities 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 unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
Not for distribution to United States newswire services or for dissemination in the United States.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/205331[4]
SOURCE: 1319472 B.C. Ltd.[5]
References
- ^ 1319472 B.C. Ltd. (www.newsfilecorp.com)
- ^ bposen@plazacapital.ca (www.newsfilecorp.com)
- ^ tony@launchcapital.ca (www.newsfilecorp.com)
- ^ https://www.newsfilecorp.com/release/205331 (api.newsfilecorp.com)
- ^ 1319472 B.C. Ltd. (www.newsfilecorp.com)