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Cavalry Capital Corp
Symbol	CVY
Shares Issued	6,462,500
Close 2023-04-17	C$ 0.095
Market Cap	C$ 613,938
Recent Sedar+ Documents

Cavalry Capital firms up QT with Home Run Oil & Gas

2023-07-11 16:26 ET - News Release

Subject: News Release - Cavalry Home Run PDF Document File: Attachment 00027 PRESS Cavalry QT - comprehensive - vFinal.pdf Not for distribution to United States newswire services or for dissemination in the United States Cavalry Capital Corp. Announces Execution of Amalgamation Agreement with Home Run Oil & Gas Inc. News Release - Vancouver, British Columbia July 11, 2023 Cavalry Capital Corp. (TSXV: CVY.P) ("Cavalry" or the "Company") is pleased to announce that, further to its news release dated April 21, 2023, it has entered into a definitive amalgamation agreement dated June 30, 2023 (the "Amalgamation Agreement") with Home Run Oil & Gas Inc. ("Home Run") in connection with the proposed business combination of Cavalry and Home Run, which transaction (the "Qualifying Transaction") is intended to constitute Cavalry's "Qualifying Transaction" (within the meaning of Policy 2.4 Capital Pool Companies (the "CPC Policy") of the TSX Venture Exchange (the "TSXV"). The Amalgamation Agreement provides for, among other things, a three-cornered amalgamation (the "Amalgamation") pursuant to which, among other things: (a) Home Run will amalgamate with 2515862 Alberta Ltd. ("Subco"), a wholly-owned subsidiary of Cavalry incorporated by Cavalry pursuant to the laws of Province of Alberta for the purposes of the Qualifying Transaction (b) all of the outstanding common shares of Home Run (each, a "Home Run Share") will be cancelled and, in consideration therefor, the holders thereof will receive common shares of Cavalry (each, a "Cavalry Share") on the basis of 2.4157 Cavalry Shares (at a deemed price of $0.10 per share) for each Home Run Share (the "Exchange Ratio") (and therefore the aggregate purchase price is $5,999,994.88), and (c) the amalgamated corporation will be a wholly-owned subsidiary of Cavalry. After giving effect to the Qualifying Transaction, the shareholders of Home Run will collectively exercise control over Cavalry. In connection with the Qualifying Transaction, it is intended that Cavalry will change its name to "Canadian Home Run Energy Corporation" or such other name as agreed to by Cavalry and Home Run and accepted by the applicable regulatory authorities (the "Name Change"). Completion of the proposed Qualifying Transaction is subject to, among other things, receipt of all necessary regulatory approvals. It is anticipated that the Qualifying Transaction will not require the approval of Cavalry's shareholders. The Amalgamation Agreement The Amalgamation Agreement contemplates that, among others, the following conditions precedent be met prior to the closing of the Amalgamation, including, but not limited to, (a) acceptance by the TSXV and receipt of other applicable regulatory approvals; (b) the concurrent completion of the Cavalry Private Placement (as defined below) for gross proceeds of at least $1,500,000 (excluding the assumption of and participation in the Cavalry Private Placement of promissory notes to be issued pursuant to an amended corporate advisory services agreement among Home Run and certain arm's length advisors (the "Corporate Advisory Services Agreement") in the amount of $382,500, and excluding the assumption of and participation in the Cavalry Private Placement of a minimum of $250,000 but not more than $350,000 of Home Run promissory notes outstanding ("Home Run Debt")); (c) receipt of the requisite approvals and completion of the Name Change and the reconstitution of the Cavalry board of directors to consist of four (4) directors as further described below (the "Board Reconstitution"); (e) no adverse material change in the business, affairs, financial condition or operations of Cavalry or Home Run has occurred between the date of entering into the Amalgamation Agreement and the closing date of the Qualifying Transaction; (f) holders of Home Run Shares (the "Home Run Shareholders") holding no more than 5% of the issued and outstanding common shares of Home Run ("Dissenting Home Run Shareholders") shall have exercised dissent rights; and (g) receipt of the requisite approval of Home Run Shareholders of the Amalgamation. There can be no assurance that the Qualifying Transaction will be completed as proposed or at all. The Amalgamation will not constitute a Non-Arm's Length Qualifying Transaction (as such term is defined in the policies of the TSXV). No person who or which is a Non-Arm's Length Party (as such term is defined in the policies of the TSXV) of Cavalry has any direct or indirect beneficial interest in Home Run or its assets prior to giving effect to the Amalgamation and no such person is an insider of Home Run. Similarly, there is no known relationship between or among any person who or which is a Non-Arm's Length Party of Cavalry and any person who or which is a Non-Arm's Length Party to Home Run. If all conditions to the implementation of the Amalgamation have been satisfied or waived, Cavalry and Home Run will carry out the Amalgamation. Pursuant to the terms of the Amalgamation, it is expected that the following security conversions, exercises and issuances will occur among Cavalry, Home Run and Home Run Shareholders immediately prior to completion of the Amalgamation: (a) Home Run and Subco will amalgamate and continue as one corporation ("Amalco") under the provisions of the Business Corporations Act (Alberta) and, as a result, the property and liabilities of Subco and Home Run will become the property and liabilities of Amalco; (b) each Home Run Share shall be cancelled and the holder thereof shall receive that number of Cavalry Shares as is equal to the number of Home Run Shares held by such Home Run Shareholder immediately prior to Amalgamation multiplied by the Exchange Ratio; and (c) each common share of Subco (each, a "Subco Share") shall be cancelled and, after the Amalgamation, Amalco shall issue one share to the Issuer in respect of every Subco Share so cancelled. Based on the number of Home Run Shares outstanding as of the date hereof, there will be approximately up to 92,112,500 Cavalry Shares outstanding upon completion of the Qualifying Transaction, on a non-diluted basis. On completion of the Qualifying Transaction, the current Cavalry Shareholders will hold an aggregate of approximately 6,462,500 Cavalry Shares, representing approximately 7.02% of the Cavalry Shares. The current Home Run Shareholders will hold an aggregate of 60,000,000 Cavalry Shares, representing approximately 65.14% Cavalry Shares. Investors in the Cavalry Private Placement are expected to hold an aggregate of approximately 22,325,000 Cavalry Shares, representing approximately 24.24% of the Cavalry Shares (including those issued in connection with the assumption of the Home Run Debt and in connection with the Corporate Advisory Services Contract). The Finder (as defined below) is expected to hold 3,325,000 Cavalry Shares, representing approximately 3.61% of the Cavalry Shares and payable in connection with the Finder's Fee (as defined below). Upon completion of the Qualifying Transaction, it is expected that Cavalry will be a Tier 2 Oil & Gas Issuer on the TSXV. Trading in the Cavalry Shares is currently suspended and will remain suspended until completion of the Qualifying Transaction. Cavalry does not intend to apply to the TSXV for reinstatement of trading of the Cavalry Shares at this time. General Information on Cavalry Cavalry was incorporated under the Business Corporations Act (British Columbia) and is a capital pool company within the meaning of the policies of the TSXV. Cavalry has not commenced operations and has no assets other than cash. Cavalry's principal business is the identification and evaluation of assets or businesses with a view to completing a "Qualifying Transaction" under the CPC Policy. General Information on Home Run Home Run was incorporated under the Business Corporations Act (Alberta) on August 5, 2021. Home Run's head office is located at Suite 610, 1414 8th Street SW, Calgary AB, T2R 1J6. Home Run is a private junior oil and gas exploration and development company currently active in west central Alberta, specifically in the Ante Creek N. Area. Home Run currently owns a 100% working interest in 47.25 sections of lands, leases and licenses (30,240 acres/12,096 hectares) in the Ante Creek N. Area, Ante Creek Area, Simonette Area, Woking Area, and the Kaybob S. Area of West Central Alberta. Home Run will, subject to the completion of the Qualifying Transaction, continue to be active in the west central Alberta Area upgrading its land and reserve position through the purchase and reprocessing of existing 2-D seismic lines, in particular covering the eight section block in Township 65 Range 24W5. Home Run plans to seek out a joint venture to drill its first well on a proven reserve location at Ante Creek N., before the end of the third quarter 2023 with drilling and completion costs expected to be carried by the joint venture partner. Home Run currently has 24,837,500 Home Run Shares issued and outstanding and no other securities are issued and outstanding. The following persons own, control or direct 10% or more of the outstanding Home Run Shares: Name Number of Home Percentage of Run Shares Home Run Shares Kinghorn Resources Ltd. (a corporation controlled by Jeffrey Standen) 7,000,000 28.18% Advantage Energy Services Ltd. (a corporation controlled Earl Hickok) 3,999,999 16.10% Deborah Leslie Eric M. Leslie 4,000,000 16.10% 3,500,000 14.09% Summary of Financial Information A summary of certain financial information for Home Run, disclosed in accordance with TSXV policies, is included in the tables below. Total Revenue Six Months Ended December 31, From Incorporation on August 5, Operating Expenses 2022 (unaudited) 2021 to June 30, 2022 (audited) Loss from continuing (CDN $) operations $ Nil (CDN $) Net Loss $ 202,309 $ Nil Total Assets $ 202,309 Total Long Term $532,730 Financial Liabilities $ 202,309 $532,730 Cash Dividends Declared $ 433,762 $ 100,000 $532,730 $279,307 $ Nil $ Nil $ Nil Further financial information will be included in the filing statement to be prepared in connection with the Qualifying Transaction. Proposed Directors and Senior Management Team Upon the closing of the Qualifying Transaction, it is anticipated that Jeffrey Standen, Owen Pinnell, Jim Silye, and John MacPhail will constitute the board of directors of Cavalry. It is also anticipated that the new senior management team of Cavalry will be comprised of Jeffrey Standen (President, Chief Executive Officer and Corporate Secretary), Robert Gillies (Chief Financial Officer). Other than the changes to the board and officers, no new insiders will be created as a result of the Qualifying Transaction. The following are brief resumes of the currently proposed directors and senior officers of Cavalry following the Qualifying Transaction: Jeffrey L. Standen Director, President, Chief Executive Officer and Corporate Secretary Mr. Standen is a petroleum landman with over 45 years of industry related experience as senior management, executive, director and founder positions with numerous private and public energy companies, including Renaissance Resources, Canadian Leader Energy, Centurion Energy International, Extreme Energy, Charger Energy and Vital Energy. Mr. Standen expects to devote approximately 100% of his time to the Resulting Issuer. Robert Gillies - Chief Financial Officer Mr. Gillies has been a Chartered Professional Accountant for approximately 45 years and for the past five years has been the a permanent part-time CFO of numerous public companies listed on the TSXV. Mr. Gillies expects to devote as much of his time as the position requires to the affairs of the Resulting Issuer. Owen C. Pinnell - Director Mr. Pinnell has over 40 years of experience in the oil & gas industry. Mr. Pinnell has acted as a founder, member of management, an executive and director of numerous private and public energy companies, including Newalta, Anadime, i3 Capital and White Owl Energy Services. Mr. Pinnell expects to devote the time necessary to fulfil his duties as a director of the Resulting Issuer. Jim Silye - Director Mr. Silye has over 40 years of experience in the oil & gas industry. Mr. Silye has acted as a founder, director and officer of many public energy companies, including Stampeder, Predator and Eagle Rock. Mr. Silye was a Reform Party M.P. from 1993-1997, and a member of the Calgary Stampeders from 1969-1974. Mr. Silye expects to devote the time necessary to fulfil his duties as a director of the Resulting Issuer. John MacPhail Director Mr. MacPhail has been a director of Cavalry since April 20, 2021. Mr. John MacPhail is a businessperson who has been at the head of five different companies. Currently, he is President, Chief Executive Officer & Director at Pacific Arc Resources Ltd. and Chairman and Director at Woodbridge Ventures, Inc. Mr. MacPhail is also on the board of three other companies. In the past, Mr. MacPhail occupied the position of Chief Executive Officer of Union Securities Ltd. and was President of Global Securities Corp. Mr. MacPhail will devote approximately 10% of his time necessary to perform the work required in connection with the management of the Resulting Issuer. Mr. MacPhail is an independent contractor of the Issuer and has not entered into a non-competition or non-disclosure agreement with the Issuer. Proposed Qualifying Transaction As the proposed Qualifying Transaction is not a "Non-Arm's Length Qualifying Transaction" (within the meaning of the CPC Policy), the Qualifying Transaction does not require approval of Cavalry Shareholders. Cavalry Private Placement Concurrently with the completion of the Qualifying Transaction, Cavalry is expected to complete a non- brokered private placement of at least 15,000,000 Cavalry Units at a price of $0.10 per Cavalry Unit for aggregate gross proceeds to Cavalry of at least $1,500,000 (the "Cavalry Private Placement") (excluding the assumption of and participation in the Cavalry Private Placement of promissory notes to be issued pursuant to the Corporate Advisory Services Agreement in the amount of $382,500, and excluding the assumption of and participation in the Cavalry Private Placement of a minimum of $250,000 but not more than $350,000 of Home Run Debt). Each Cavalry Unit will be comprised of one Cavalry Share and one common share purchase warrant ("Cavalry Warrant"). Each Cavalry Warrant shall entitle the holder to purchase a Cavalry Share at an exercise price of $0.15 for a period of 2 years from the date of issuance and in accordance with its terms. Cavalry may pay finder's fees in cash or securities in connection with the Cavalry Private Placement. The net proceeds from the Cavalry Private Placement will be used to satisfy the Initial Listing Requirements (as defined in the Policies of the TSXV) related to working capital and financial resources, in accordance with Section 9.5 of the CPC Policy and (upon completion of the Qualifying Transaction) to upgrade Home Run's land position and reserve position through the purchase and reprocessing of existing 2-D seismic lines, in particular covering the eight-section block in Township 65 Range 24W5 as recommended in the Reserves Report. All securities issued under the Cavalry Private Placement will be subject to hold periods expiring four months and one day after the date of issuance. Additional restrictions may apply under the rules of the TSXV and applicable securities laws. Finder's Fee In connection with the Transaction, Cavalry entered into a finder's fee agreement with Circa Capital Corp. (the "Finder"), an arm's length party, for the introduction of Cavalry and Home Run. Cavalry has agreed to issue the Finder 3,325,000 Cavalry Shares (the "Finder's Fee") upon closing of the Qualifying Transaction, subject to the approval by the TSXV. Loan In connection with the Qualifying Transaction, Cavalry has advanced an unsecured loan (the "Loan") in the amount of $25,000 to Home Run, in order to help fund Home Run's costs incurred in connection with the Qualifying Transaction. The Loan accrues interest at a rate of 10% per annum, calculated daily from the date of advance, which interest will be waived upon the closing of the Qualifying Transaction. The Loan will mature and be payable no later than the date that is two months following the termination of the Amalgamation Agreement. Sponsorship of Transaction Sponsorship of the Amalgamation, as the Qualifying Transaction of Cavalry, is required by the TSXV unless an exemption from this requirement is available in accordance with the policies of the TSXV. Cavalry intends to apply to the TSXV for an exemption from the sponsorship requirements for the Qualifying Transaction. There is no assurance that an exemption from this requirement will be obtained. Additional Information Cavalry will provide further details in respect of the Qualifying Transaction and Cavalry Private Placement in due course by way of a subsequent news release, however, Cavalry will make available to TSXV all information, including financial information, as may be requested or required by the TSXV. All information contained in this news release with respect to Cavalry and Home Run was supplied by the respective party, for inclusion herein, without independent review by the other party, and each party and its directors and officers have relied on the other party for any information concerning the other party. Completion of the Qualifying Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable pursuant to TSXV requirements. The Qualifying Transaction cannot close until the required Home Run shareholder approval is obtained. There can be no assurance that the Qualifying Transaction or the Home Run Private Placement will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the management information circular of Home Run or filing statement of Cavalry to be prepared in connection with the Qualifying Transaction, any information released or received with respect to the Qualifying Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Cavalry should be considered highly speculative. The TSXV has not in any way passed upon the merits of the proposed Qualifying Transaction and has neither approved nor disapproved the contents of 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 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. For further information please contact: Cavalry Capital Corp. Home Run Oil & Gas Inc. Brandon Bonifacio, Chief Executive Officer Jeff Standen, Chief Executive Officer Phone: (604) 337-4997 Phone: (403) 615-5827 Cautionary Note Completion of the Qualifying Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable pursuant to TSXV requirements, majority of the minority shareholder approval. Where applicable, the Qualifying Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Qualifying Transaction will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Qualifying Transaction, any information released or received with respect to the Qualifying 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. The TSXV has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release. Neither the TSXV nor its Regulation Services Provider (as that term is defined in policies of the TSXV) accepts responsibility for the adequacy or accuracy of this press release. Forward-Looking Statements This news release contains "forward-looking information" within the meaning of applicable securities laws relating to Home Run's expected drilling and development plans, the proposal to complete the Qualifying Transaction and associated transactions, including statements regarding the terms and conditions of the Qualifying Transaction, the Name Change, the Cavalry Private Placement, the use of proceeds of the Cavalry Private Placement, the proposed directors and officers of Cavalry upon closing of the Qualifying Transaction, the business and operations of Cavalry after the Qualifying Transaction, the Exchange Ratio, Cavalry obtaining an exemption from the TSXV's sponsorship requirement, the receipt of all necessary regulatory and other approvals and satisfaction of all other closing conditions in connection with the Qualifying Transaction and other statements that are not historical facts. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. 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; delay or failure to receive board, shareholder or regulatory approvals; the price of crude oil, natural gas liquids and/or natural gas; and the results of Home Run's drilling and development plans. 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 forward-looking statements. Cavalry and Home Run disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. The statements in this press release are made as of the date of this press release. Cavalry undertakes no obligation to comment on analyses, expectations or statements made by third-parties in respect of Cavalry, Home Run, their securities, or their respective financial or operating results (as applicable). The information about Home Run contained in the press release has not been independently verified by Cavalry. There can be no assurance that the Qualifying Transaction will be completed or, if completed, will be successful.