Syd Financial Inc. Announces Entry into Definitive Agreement with Santa Marta Life Sciences Corp.
Not for distribution to U.S. Newswire Services or for dissemination in the United States.
SYD FINANCIAL INC.
303 – 570 Granville Street
Vancouver, BC V6C 3P1
FOR IMMEDIATE RELEASE September 10, 2019
SYD FINANCIAL INC. ANNOUNCES ENTRY INTO DEFINITIVE AGREEMENT
WITH SANTA MARTA LIFE SCIENCES CORP.
Vancouver, B.C. – Syd Financial Inc. (the “Company” or “Syd”) (CSE: SYDF) is pleased to announce that
further to its press release dated June 25, 2019 the Company has entered into a definitive business
combination agreement dated effective September 6, 2019 (the “ Agreement”) with Santa Mart a Life
Sciences Corp . (“Santa Marta ”) and a wholly -owned subsidiary of the Company, 1221439 B.C. Ltd .
(“Newco”), formed for the purpose of completing the transaction. Santa Marta is an arm’s length
company incorporated under the Business Corporations Act (British Columbia) (the “BCBCA”).
About Santa Marta
Santa Marta is cannabis producer operating its business in Colombia, through its wholly-owned Colombian
subsidiary (“VDL”), to develop cannabis oils and products for the international medical marketplace.
Santa Marta is currently legally operating its business on the basis of a licence, issued by the applicable
government authority in Colombia, and held by VDL, to cultivate, extract and sell non -psychoactive
cannabis. In addition, through its wholly -owned subsidiary VDL, Santa Marta is currently seeking a
resolution from the applicable government authority in Colombia (Ministry of Justice) granting VDL a
licence to cultivate and sell psychoactive cannabis (the “THC Cultivation Licence”), as well as a resolution
from the applicable government authority in Colombia (Ministry of Health) granting VDL a licence to
extract and sell psychoactive cannabis (the “THC Extraction Licence”).
The Transaction
Pursuant to the Agreement, the Company has agreed to acquire all of the issued and outstanding
securities of Santa Marta by way of a t hree-cornered amalgamation (the “Transaction”) between the
Company, Santa Marta and Newco pursuant to the provisions of the BCBCA. The Transaction will result in
a reverse takeover of the Company by the security holders of Santa Marta and constitute a change of
business for the Company from a mineral exploration company to a company engaged in the cannabis
industry. The Transaction will result in a change of control of the Company and will constitute a
“fundamental change” under the policies of the Canadian Securities Exchange (the “CSE”).
Completion of the Transaction is subject to a number of conditions, includi ng the Company having
completed the Syd Financing (as defined below) , receipt of all necessary shareholder and regulatory
approvals, the execution of related transaction documents, and approval of the CSE, including approval
for the listing on the CSE of the common shares of the Company (the “ Syd Shares”) to be issued on
completion of the Transaction to the shareholders of Santa Marta (the “Santa Shareholders”).
Prior to the completion of the Transaction, but following completion of the Syd Financing, the Company
will undertake a consolidation (the “Consolidation”) of the issued and outstanding Syd Shares, including
any pre-Consolidated Syd Shares issued in the Syd Financing, on a ratio of one post -Consolidation Syd
Share for every two pre -Consolidation Syd Share s. Stock options (“Syd Options ”) and warrants (“Syd
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Warrants”) to purchase Syd Shares which are outstanding as of the date of the Agreement will likewise
be repriced and adjusted in accordance with the Consolidation, as will any Syd W arrants issued in
connection with the Syd Financing.
On completion of the Transaction, the Company will issue to all of the Santa Shareholders in exchange for
all of their Santa Shares , on a pro -rata basis, the total number of post -Consolidated Syd S hares
(collectively, the “Consideration Shares”), at a deemed price of $0.25 per post -Consolidation Syd Share,
as is equal to $26,500,000, plus the value of the gross proceeds of the Santa Financing (as defined below).
The Consideration Shares will be issued to the Santa Shareholders on completion of the Transaction,
however, a portion of the Consideration Shares having an aggregate value of $13,125,000 shall be held in
escrow (the “Escrow Shares”) pursuant to an escrow agreement between the Company, Santa Marta ,
Newco and a mutually acceptable escrow agent. The Escrow Shares will be released to the Santa
Shareholders after completion of the Transaction only upon the grant to VDL of the sooner of either the
THC Cultivation Licence or the THC Extraction Licence.
On completion of the Transaction, all Syd Options, Syd Warrants and any Santa Share purchase warrants
issued by Santa Marta in the Santa Financing will be exchanged and replaced, on an equivalent basis, with
options to purchase shares and share purchase warrants, as applicable, in the capital of the resulting issuer
following completion of the Transaction (the “Resulting Issuer”).
On completion of the Transaction, the Company intends to change its name to “Santa Marta Life Sciences
Corp.” or such other name as may be agreed by the parties.
Subject to CSE approval and the availability of applicable exemptions from prospectus and registration
requirements, and in addition to brokerage fees payable to any investment dealers which act as agents in
connection with the Syd Financing o r the Santa F inancing, the following fees will be paid in connection
with the Transaction: (a) Stamatis Ventures Ltd., which will be entitled to a fee for arranging the sale of
Santa Marta in connection with the Business Combination equal to $914,000, and payable in ei ther cash
or in shares of the Resulting Issuer on completion of the Transaction (the “ Resulting Issuer Shares”), or
any combination of both, at the election of the Resulting Issuer, with any Resulting Issuer Shares issuable
at a value of $0.25 per Resultin g Issuer Share and to be issued and released one -half on the completion
of the Transaction, and the balance being deposited into escrow and released subject to the provisions of
the Escrow Agreement; and (b) Fairchild Consulting Corp., which will receive a fee equal to $1,250,000 for
introducing Santa Marta and the Company in connection with the Business Combination, and payable in
Resulting Issuer Shares issuable at a value of $0.25 per Resulting Issuer Share and to be issued and
released one-half on the completion of the Transaction, and the balance being deposited into escrow and
released subject to the provisions of an escrow agreement.
In addition, certain securities issued in connection with the Transaction to principals of the Resulting Issuer
will be subject to escrow requirements of the CSE, mutually agreed upon escrow conditions, and hold
periods as required by the CSE and applicable securities laws.
On or before November 29, 2019, the Company will complete a subscription receipt financing for
aggregate gross proceeds of no less than $6,000,000 at a price of $0.125 per subscription receipt (each
subscription receipt being convertible into one pre -Consolidated Syd Share and one pre -Consolidated
warrant to purchase one additional Syd Share exercisable at $0.375 per pre-Consolidated Syd Share) (the
“Syd Financing ”). Under the terms of the Agreement, Santa Marta is entitled , but not required , to
complete a private placement offering of up to 4,000,000 units at an offering price of $0.75 per unit to
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raise aggregate gross proceeds of up to $3,000,000, each unit consisting of one (1) Santa Share and one
(1) Santa Warrant exercisable at $2.25 per Santa Share, such offering to be conducted by Santa Marta
between the date of the Agreement and November 29, 2019 (the “Santa Financing”).
Directors and Officers
Upon completion of the Transaction, and subject to the approval of the CSE, the current directors and
officers of the Company will resign, with the exception of Mario Pezzente who will remain as a director of
the Resulting Issuer. Nick Standish will be appointed as President, Chief Executive Officer and as a director
of the Resulting Issuer. Blair Lowther and Derek Boyd will also be appointed as directors of the Resulting
Issuer. A nominee of Santa Marta shall be appointed as Chief Financial Officer of the Resulting Issuer. One
additional nominee of Santa Marta will be proposed as an additional director of the Resulting Issuer for
election by the shareholders after the completion of the Transaction at the first annual general meeting
of shareholders of the Resulting Issuer.
Trading in the Company’s Shares
Trading in the common shares of the Company was halted on June 25, 2019 in compliance with the policies
of the CSE, will remain halted until all necessary filings have been accepted by applicable regulatory
authorities, and the listing of the Resulting Shares on the CSE has been completed.
General
Further details of the Transaction will be included in subsequent news releases and disclosure documents
(which will include business and financial information in respect of Santa Marta) to be filed by the
Company in connection with the Transaction. There is no assurance the Transaction will be completed as
planned or at all.
All of the information included in this news release with respect to Santa Marta has been provided by
management of Santa Marta and has not been independently verified by the Company at this time.
SYD Financial Inc.
On behalf of the Board of Directors,
“Keith Anderson”
Keith Anderson, CEO, Secretary and Director, Syd Financial Inc.
For further information on the Company, please email [email protected]
Keith Anderson
Syd Financial Inc.
(604) 786-7774
The Canadian Securities Exchange (operated by CNSX Markets Inc.) has in no way passed upon the merits
of the proposed Transaction and has neither approved nor disapproved of the conte nts of this press
release.
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Disclaimer for Forward-Looking Information
Certain statements in this press release are forward -looking statements and are prospective in nature.
Forward-looking statements are not based on historical facts, but rather on current expectations and
projections about future events, and are therefore s ubject to risks and uncertainties which could cause
actual results to differ materially from the future results expressed or implied by the forward -looking
statements, including: the receipt of all necessary regulatory approvals, the ability to conclude th e
Transaction, capital expenditures and other costs, and financing and additional capital requirements.
These statements generally can be identified by the use of forward-looking words such as “may”, “should”,
“will”, “could”, “intend”, “estimate”, “plan”, “anticipate”, “expect”, “believe” or “continue”, or the
negative thereof or similar variations. Forward-looking statements in this news release include statements
regarding the terms of the proposed Transaction, completion of the proposed Transaction, the Syd
Financing and the Santa Financing, if any, the consolidation of the shares of the Company and intended
name change of the Company, the listing of the shares of the R esulting Issuer on the CSE , and the
anticipated business plan of the Resulting Issuer subsequent to completion of the Transaction, including
the obtaining of cannabis -related licences in Colombia . Although management of the Company has
attempted to identify important factors that could cause actual results to differ materially from those
contained in forward-looking statements or forward-looking information, there may be other factors that
cause results not to be as anticipated, estimated or intended. 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 and forward looking information. The Company assumed no obligation to update any forward-
looking statements or forward -looking information that are incorporated by reference herein, except as
required by applicable securities laws.