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Yukoterre Resources Inc (2)
Symbol YT
Shares Issued 10,520,541
Close 2020-06-15 C$ 0.10
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Yukoterre, Silo sign LOI for reverse takeover

2020-06-17 08:16 ET - News Release

Mr. Kenny Choi reports

YUKOTERRE RESOURCES ANNOUNCES PROPOSED REVERSE TAKEOVER BY PSYCHDELICS COMPANY SILO WELLNESS

Yukoterre Resources Inc. has entered into a binding letter of intent with FlyOverture Equity Inc., operating as Silo Wellness, dated June 16, 2020, which sets forth, in general terms, the basic terms and conditions upon which Yukoterre and Silo will combine their business operations resulting in a reverse takeover of Yukoterre by Silo and its shareholders with a new ticker symbol intended as SILO, insofar as it is available. The LOI was negotiated at arm's length and the proposed transaction will be an arm's-length transaction.

Overview of Silo

Silo was founded in Oregon and has been in the psychedelics and functional mushroom space since 2018 and ultimately formulated and announced a patent-pending psilocybin nasal spray in Jamaica in 2019. This metered-dosing delivery modality was created for consumer microdosing to address some of the primary issues that may prevent many from trying natural psychedelics for the first time, including dose reliability, taste, stomach upset and stigma. Its primary benefit is an uptake speed that is faster than nature intended for convenience and to help prevent dosage stacking, a problem that is most well known from cannabis edibles overdosing.

In addition to its IP (intellectual property) portfolio, Silo is focusing on consumer product and wellness centre/retreat brand development for psychedelic and functional mushrooms. Its go-to-market revenue strategy includes scaling its U.S. Silo Reboot brand of functional mushrooms and its magic mushroom cultivation and psychedelic retreat operations in Jamaica. Following the proposed transaction, Silo anticipates that it will continue to grow its operations organically and by strategically integrating complementary businesses to its operations.

The proposed transaction

In connection with the proposed transaction, Silo shall complete a concurrent private placement offering of Silo common shares for gross proceeds of approximately $2.5-million. Further details on the private placement, including the type and number of securities offered for issuance and the agent or agents engaged to broker the private placement, if any, will be provided and confirmed in due course once available.

It is anticipated that Yukoterre will hold an annual general and special meeting of its shareholders in connection with the proposed transaction, to, among other items of business (a) effect a share consolidation of common shares of Yukoterre on a two-for-one basis, (b) rename Yukoterre to Silo Wellness Inc. and (c) elect a board of directors with two director nominees designated by Silo, two director nominees designated by Yukoterre and one director mutually nominated by Yukoterre and Silo, in a manner that complies with the requirements of the Canadian Securities Exchange and applicable securities and corporate laws.

Pursuant to the LOI, upon completion of the proposed transaction:

  1. All issued and outstanding Silo shares will be exchange for Yukoterre shares, whereby each holder of Silo shares will receive one Yukoterre share for each Silo share held.
  2. All outstanding options, warrants and future obligations to issue Silo shares will be exchanged with options, warrants and future obligations to issue common shares in the resulting issuer.
  3. Yukoterre will change its name to Silo Wellness Inc., or such other name as may be acceptable to Silo, the CSE and regulatory authorities.
  4. The board of directors of the resulting issuer will be reconstituted to comprise five directors, two of which will be nominees of Yukoterre, two of which will be nominees of Silo and one of which will be a mutual nominee of Yukoterre and Silo. Management of the resulting issuer will fully comprise Silo representatives.

Yukoterre and Silo anticipate that the proposed transaction will close on or before Aug. 14, 2020, or such other date as mutually agreed by both parties. When a definitive agreement between Yukoterre and Silo is executed, Yukoterre will issue a subsequent press release containing the details of the definitive agreement and additional terms of the proposed transaction. Completion of the proposed transaction is subject to a number of conditions, including but not limited to, receiving all required shareholder, regulatory and other approvals. There can be no assurance that the proposed transaction will be completed as proposed or at all. The LOI shall terminate if the proposed transaction is not completed on or before Oct. 30, 2020. No finders' fees are payable in connection with the proposed transaction.

About Yukoterre Resources Inc.

Yukoterre is engaged in the business of mineral exploration and the acquisition of mineral property assets in the Yukon. Its objective is to locate and develop mineral properties of merit and to conduct its exploration program on the Division Mountain property.

About Silo

Silo is an industry leader in the mushroom/psychedelics space. With current operations continuing in Jamaica for psilocybin cultivation and retreats, Silo seeks to become the predominant leader in the mushroom industry globally. Silo plans to quickly expand operations and sales to the states and provinces that legalize mushrooms. Silo has a sophisticated technical team that has created a patent-pending nasal spray to allow microdosing of mushrooms. Silo is currently undergoing final steps for a go-public event that will allow investors to access the mushroom space as one of the few companies that have revenue.

We seek Safe Harbor.

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