Oracle Energy Corp. Provides Update to Previously Announced Letter of Intent to Acquire Methanogenesis Corporation

Source Company Press Release
Company Oracle Energy Corp.
Tags Country: United States, M&A: Corporate Deal, Deals
Date April 02, 2020

Oracle Energy Corp. (TSX.V: OEC) (FRA: O2EM ("Oracle" or the "Company") is pleased to provide an update to its March 2, 2020, news release, in which it announced its letter agreement dated February 28, 2020 (the "LOI") with Methanogenesis Corporation ("Methano") pursuant to which the parties have agreed to complete a business combination (the "Transaction") by way of share exchange that will have the effect of Oracle acquiring all of the issued and outstanding common shares in the capital of Methano (the "Methano Shares") which, on closing, will be approximately 29,000,000 common shares. The Transaction is subject to TSX Venture Exchange (the "TSXV") approval and is anticipated to constitute a" Fundamental Acquisition" in accordance with TSXV Policy. There are currently 27,620,500 Methano Shares outstanding but it is anticipated that as a result of further future financings to be completed by Methano prior to completion of the Transaction that number will increase to approximately 29,000,000 common shares.

Summary of the Transaction

Pursuant to the binding LOI, Oracle will acquire Methano by way of a share exchange (the "Share Exchange") subsequent to Oracle undergoing a 5:1 share consolidation on the basis of one post-consolidation share for each five pre- consolidation shares (the "Share Consolidation"). The Share Consolidation will result in there being 13,464,520 common shares of Oracle outstanding and following the acquisition of Methano there will be approximately 41,085,020 common shares outstanding prior to taking into account further Oracle shares to be issued pursuant to the Financing outlined below. No finders' fees will be payable in connection with the Transaction.

The completion of the Transaction is subject to the satisfaction of certain conditions precedent, including but not limited to: (i) Oracle completing the Financing (as defined below); (ii) satisfactory due diligence review by each of Oracle and Methano; (iii) the negotiation, execution and delivery of a definitive agreement (the "Definitive Agreement") which will supersede the LOI; (iv) the execution and delivery of a definitive agreement between Methano and the University referred to below; (v) receipt of all requisite third party consents, waivers, permits, orders and approvals, including, without limitation, the approval of the TSXV; (vi) the approval of the respective boards of directors of Oracle and Methano; and (vii) the agreement and approval of the shareholders of Methano. Accordingly, there can be no assurance that the Transaction will be completed on the terms proposed above or at all.

Subject to satisfaction or waiver of the conditions precedent referred to herein and to be contained in the Definitive Agreement Oracle and Methano anticipate that the Transaction will be completed on or before June 30, 2020. Each of Oracle and Methano will bear their own costs in respect of the Transaction.

About Methanogenesis Corporation

Methano is an early stage Canadian corporation organized to combine microbiological approaches with genetics and metabolic engineering to produce genetically modified microbes "GMO's" for the efficient and cost effective conversion of methane CH4 to methanol CH3OH. Methano will be providing funding to a major university in California (the "University") for research and development of the conversion process. It is anticipated that intellectual property resulting from the research and development will be owned by the university which will then provide Methano with an exclusive worldwide license to commercialize the resulting technology.

Oracle Financing

The Transaction is subject to the completion of a non-brokered private placement financing by Oracle of up to $600,000 (the "Financing") which, when added to Methano's post-closing working capital, will provide sufficient capital to satisfy working capital and financial resources in order for the Company to carry out its financial plan for a minimum of six months post-closing of the Transaction. There may be finders' fees paid in accordance with TSXV policy in conjunction with the Financing.

Subsequent News Release

Oracle will disseminate a subsequent news release prior to the shares of the Company being reinstated for trading. The subsequent news release will address various outstanding issues including: biographies on the management of Methano and on any new directors of the Company; and the details of the proposed financing to be completed in conjunction with the closing of the Transaction.

Regulatory Matters

The Company will be seeking a waiver from the TSX Venture Exchange for the need to engage a sponsor for the proposed Transaction. The Company believes the Transaction will constitute a Fundamental Acquisition (as that term is defined under TSXV policy) as it does not anticipate that completion of the Transaction will result in the creation of a control block. In the event that a control block is created the Transaction will in all probability result in a reverse takeover (RTO) under TSXV policy which, among other things, will require the Company to seek shareholder approval for the Transaction.

There is no assurance that the Financing will be completed. All sales, exchanges, and issuances of any units, shares, warrants, and securities in connection to the Financing and the Transaction will be subject to regulatory approval including, but not limited to, the approval of the TSXV.

Source: EvaluateEnergy® ©2024 EvaluateEnergy Ltd