Skyscape Capital Inc. and PesoRama Inc. Announce Execution of Amalgamation Agreement and Oversubscribed $5.5 Million Convertible Debenture Financing

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Toronto, Ontario–(Newsfile Corp. – March 22, 2021) –  Skyscape Capital Inc. (TSXV: SKY.P) (the “Corporation” or “Skyscape“) and PesoRama Inc. (“PesoRama“) are pleased to announce that they have entered into an amalgamation agreement dated March 9, 2021 (“Amalgamation Agreement“) between the Corporation, PesoRama and 11518003 Canada Corp. (“Subco“), a wholly-owned subsidiary of the Corporation, which sets forth the terms and conditions upon which Skyscape will acquire PesoRama by way of reverse takeover (the “Proposed Transaction“) in accordance with the policies of the TSX Venture Exchange (the “TSXV“). Skyscape intends that the Proposed Transaction will constitute its Qualifying Transaction and upon completion of the Proposed Transaction the combined entity (the “Resulting Issuer“) will continue to carry on the business of PesoRama.

Proposed Transaction

Under the terms of the Amalgamation Agreement, the Proposed Transaction will be completed by way of a three cornered amalgamation under the laws of Canada, whereby Subco will merge with and into PesoRama, with PesoRama surviving as a wholly-owned subsidiary of Skyscape. Immediately prior to or concurrently with closing of the Proposed Transaction, Skyscape is expected to change its name to “PesoRama Inc.” Following completion of the Proposed Transaction, the Resulting Issuer will hold all of PesoRama’s assets and conduct the business of PesoRama under the PesoRama name.

As a condition to the completion of the Proposed Transaction, the parties intend to complete financings (the “Concurrent Financings“) of up to $25 million, consisting of up to $10 million through a subscription receipts financing led by Fundamental Private Markets (“Fundamental“) of Mexico City and a brokered financing of up to an additional $15 million which will be qualified through a prospectus filed with securities regulators in Canada. It is expected that Concurrent Financings will result in the issuance of the same securities of the Resulting Issuer on the same terms to investors in each of the financings.

Completion of the Proposed Transaction will be subject to a number of other conditions including, but not limited to, closing conditions customary to transactions of the nature of the Proposed Transaction, completion or waiver of sponsorship, requisite shareholder approvals including the approval of the holders of common shares of PesoRama for the Proposed Transaction and approval of the name change, approvals of all regulatory bodies having jurisdiction in connection with the Proposed Transaction and approval of the TSXV including the satisfaction of its initial listing requirements. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.

Additional terms of the Proposed Transaction were previously disclosed in the press release of Skyscape dated December 11, 2020, available under the Corporation’s SEDAR profile at www.sedar.com.

Convertible Debenture Financing.

PesoRama and Skyscape also announce that PesoRama has secured approximately $5,500,000 pursuant to a convertible debenture unit financing (the “Convertible Debenture Financing“) which was well over subscribed from the original proposed $2,500,000. Pursuant to the Convertible Debenture Financing, PesoRama will issue approximately 5,500,000 units (the “Units“), with each Unit comprised of one debenture (a “Debenture“) with a principal amount of $1,000 and 50 warrants (the “Warrants“). The Warrants are exercisable into common shares of PesoRama at an exercise price of $1.25 per share for a period of two years from the completion of the Proposed Transaction. In connection with the Proposed Transaction, the principal amount of the Debentures will be automatically convertible into the same securities of the Resulting Issuer as issued pursuant to the Concurrent Financings at a conversion price that is a 15% discount to the issue price pursuant to the Concurrent Financings.

PesoRama intends to use the monies raised from the Convertible Debenture Financing to continue opening new retail stores in Mexico City. To date, PesoRama has opened 11 stores and has signed leases for an additional nine stores which the company anticipates will open by the end of June 2021.

Canaccord Engagement

PesoRama and Skyscape also announce that they have engaged Canaccord Genuity as lead agent for the companies’ anticipated prospectus offering to be completed in connection with the Proposed Transaction. The companies expect to file a preliminary prospectus in the upcoming weeks.

“These are very exciting times for PesoRama and completion of this financing marks a new beginning for the company,” said Rahim Bhaloo, Executive Chairman of PesoRama. “We will be opening new stores every month going forward and everyone on our team, including our local partner, Fundamental, are laser focused on execution of our business plan and completing our public listing by the second quarter of this year. I would like to thank all of our shareholders and banking partners for all of their continued support.”

“2021 will be a transformational year for the company as we expect to rapidly expand our operations and retail store base in Mexico City and beyond,” added Ed Sivitilli, CEO of PesoRama. “The recent financing and our planned public listing provide us the foundation and set the stage for PesoRama to become the leading discount retailer in Mexico.”

About PesoRama

PesoRama is a Mexican value single price point dollar store retailer. PesoRama launched operations in 2019 in Mexico City and the surrounding areas targeting high density, high traffic locations. PesoRama’s stores offer consistent merchandise offerings which include items in the following categories: household wares, kitchenware, home cleaning products, home décor products, seasonal products, stationary, toys and games, arts and crafts materials, electronics, souvenirs, novelties, jewelry, clothing, footwear, headwear, costumes, personal care products, health and beauty, cosmetics, food, beverages, snacks, confectionary, pet food and pet accessories, hardware, garden tools and other general merchandise. To date, PesoRama has opened 11 stores and has signed leases for several more.

Additional Information

Completion of the Proposed Transaction is subject to a number of conditions including, but not limited to, closing conditions customary to transactions of the nature of the Proposed Transaction, approvals of all regulatory bodies having jurisdiction in connection with the Proposed Transaction and TSXV acceptance. Where applicable, the Proposed Transaction cannot close until the required shareholder approvals are obtained and there can be no assurance that the Proposed Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the prospectus 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. Trading in the securities of a capital pool company should be considered highly speculative.

All information contained in this press release with respect to Skyscape and PesoRama was supplied by the respective parties, for inclusion herein, and each party and its directors and officers have relied on the other party for any information concerning the other party.

This press release is not an offer of the securities for sale in the United States. The securities may not be offered or sold in the United States absent registration or an available exemption from the registration requirements of the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act“) and applicable U.S. state securities laws. Skyscape will not make any public offering of the securities in the United States. The securities have not been and will not be registered under the U.S. Securities Act.

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 these securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Skyscape and PesoRama will provide further details in respect of the Proposed Transaction in due course and will make available all information, including financial information as required by the TSXV and will provide, in a press release to be disseminated at a later date, the required disclosure.

For further information please contact:

Skyscape Capital Inc.:
Paul Pathak, Director
Telephone: 416-644-9964
Email: ppathak@chitizpathak.com

PesoRama Inc.:
Rahim Bhaloo, Executive Chairman
Telephone: 416-816-3291
Email: rahim@rahimbhaloo.com

Cautionary Statements

This press release contains “forward-looking information” within the meaning of applicable securities laws relating to the proposal to complete the Proposed Transaction and associated transactions, including statements regarding the terms and conditions of the Proposed Transaction and the Concurrent Financing. Although the PesoRama and the Corporation believe in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because the Corporation and PesoRama can give no assurance that they will prove to be correct. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risk that the parties will not proceed with the Proposed Transaction and associated transactions, the ultimate terms of the Proposed Transaction and associated transactions differing from those that currently are contemplated, and the Proposed Transaction and associated transactions not being successfully completed for any reason (including the failure to obtain the required approvals or clearances from regulatory authorities). The statements in this press release are made as of the date of this release. The Corporation and PesoRama undertake no obligation to comment on analyses, expectations or statements made by third-parties in respect of the Corporation, PesoRama, their securities, or their respective financial or operating results (as applicable).

Neither the TSX Venture Exchange, Inc. nor its Regulation Services Provider (as that term is defined in the polices of the TSX Venture Exchange) has in any way passed upon the merits of the Acquisition and associated transactions and neither of the foregoing entities has in any way approved or disapproved of the contents of this press release.

Neither the TSX Venture Exchange, Inc. nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/78216