Tailwind Capital Corporation and Kairos Metals Corp. Announce Amalgamation Agreement in Respect of Qualifying Transaction
Tailwind Capital Corporation and Kairos Metals Corp. Announce Amalgamation
Agreement in Respect of Qualifying Transaction
CALGARY, ALBERTA, November 4, 2020
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN
THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY
CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW.
Tailwind Capital Corporation ( "Tailwind") (TSX VENTURE: TW.P) and Kairos Metals Corp.
("Kairos") are pleased to announce that they have entered in to a definitive agreement dated
August 10, 2020 (the "Amalgamation Agreement") pursuant to which Tailwind will
amalgamate with Kairos (the "Amalgamation") to complete Tailwind’s qualifying transaction
(the "Transaction") in accordance with the policies of the TSX Venture Exchange Inc. (the
"TSXV"). Upon completion of the Amalgamation, it is intended that the resulting corporation
will be known as "San Lorenzo Gold Corp . ", or such other name as the parties may agree (the
"Resulting Issuer "). The Transaction is subject to the receipt of all necessary regulatory and
shareholder approvals as well as the satisfaction of conditions to closing as set out in the
Amalgamation Agreement.
About Kairos
Kairos is a reporting issuer i ncorporated in January 2018 under the laws of the Province of
Alberta and currently has 25,266,704 common shares outstanding and no dilutive securities such
as options or warrants outstanding. Kairos’ principal business is the acquisition and exploration
of mineral properties in Chile. Kairos holds a 100% interest in 10,396 hectares of mineral claims
through its wholly owned Chilean subsidiary, Compañía Minera San Lorenzo Limitada. Those
claims are divided into the “Salvadora” and the “Nancagua” claim group s or properties.
Salvadora is a prospective copper-gold porphyry property and has been the subject of significant
exploration efforts by Kairos and its predecessors since 2014 , which includes significant
sampling and geophysical surveying together with tw o exploration drilling programs totalling
approximately 2,725 meters of drilling. Kairos has also conducted programs of surface sampling
and geochemical analysis on Nancagua which is a prospective high grade epithermal gold -silver
property.
As of the date hereof, there are 25,266,704 outstanding common shares of Kairos (the "Kairos
Common Shares"). The following person own, control or direct 10% or more of the outstanding
Kairos Common Shares:
Name
Number of Kairos Common
Shares
Percentage of Outstanding
Kairos Common Shares
Al J. Kroontje 2,811,750 11.13%
Summary of Financial Information for Kairos
The following table sets forth selected financial information for Kairos for the financial years
ended December 31, 2019 and the period from January 15, 2018 (date of incorporation) to
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December 31, 2018 and for the six-month period ended June 30, 2020. The financial information
has been prepared in accordance with International Financial Reporting Standards.
Kairos Metals Corp.
Six months ended
June 30, 2020
(Unaudited)
Year ended
December 31, 2019
(Audited)
Period from
January 15, 2018
(date of
incorporation) to
December 31, 2018
(Audited)
($) ($) ($)
Operating Activities
Net loss (106,659) (907,169) (243,847)
Other comprehensive income (3,758) 73,104 -
Interest income (2,648) - -
Gain on reduction in loan payable (549,153) - -
Fair value adjustment of notes
payable - - (441,048)
Transaction costs included in notes
payable - - 65,000
Interest accrued on notes payable 32,808 74,145 48,998
Accretion of notes receivable 172,864 558,178 313,434
Foreign exchange loss 426,533 60,378 226,241
Trade and other payables (4,341) 65,371 59,452
Other receivables 1,049 (1,049) Nil
Cash Flow (used in) provided by
operating activities (33,305) (77,042) 28,230
Balance Sheet
Total assets 2,326,250 3,372,058 3,733,932
Total liabilities 1,340,114 3,682,093 3,136,798
Total equity 986,136 (310,035) 597,134
Private Placement
In connection with the Transaction, Tailwind intends to complete a non-brokered private
placement (the "Private Placement ") of up to 21,428,572 common shares (the " Tailwind
Common Shares") at a price of $ 0.07 per Tailwind Common Share for gross proceeds of up to
$1,500,000.
In connection with the Private Placement, Tailwind, in its discretion, may pay a cash commission
of up to 7% of the gross proceeds from the sale of Tailwind Common Shares and a number of
broker warrants ( "Tailwind Broker Warrants ") that is up to 7% of the number of Tailwind
Common Shares sold pursuant to the Private Placement. Each Tailwind Broker Warrant will
entitle the holder to one (1) Tailwind Common Share and is exercisable at a price of $ 0.07 per
Tailwind Common Share for a period of up to 12 months from the date of issuance, subject to the
requirements of the TSXV.
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The Private Placement will be completed pursuant to certain exemptions from the prospectus
requirements under applicable securities laws . T he Private Placement is also available to all
eligible existing shareholders of Tailwind (the "Existing Shareholder Exemption ") or
subscribers who receive suitability advice from a registered investment dealer (the "Investment
Dealer Exemption") in reliance upon the prospectus exemption s described in ASC Rule 45-516
Prospectus Exemptions For Retail Investors And Existing Security Holders and other equivalent
provisions of applicable securities laws in other jurisdictions in Canada.
In the following order, depending on the proceeds raised from the Private Placement and
assuming completion of the Transaction, Tailwind intends to use up to $105,000 for
commissions and expenses of the Private Placement, up to a maximum of $ 485,000 for the
exploration of the Salvadora Cu-Au Project, and up to $937,000 for general working capital and
for legal and transaction costs associated with the Transaction.
The aggregate acquisition cost to a subscriber under the Existing Shareholder Exemption cannot
exceed $15,000 unless that subscriber has obtained advice from a registered investment dealer
regarding the suitability of the investment. Tailwind has fixed October 23 , 2020 as the record
date for the purpose of determining existing shareholders of Tailwind who are enti tled to
participate in the Private Placement pursuant to the Existing Shareholder Exemption. Subscribers
purchasing Tailwind Common Shares under the Existing Shareholder Exemption will need to
represent in writing that they meet certain requirements of the Existing Shareholder Exemption,
including that on or before the record date, they became a shareholder of Tailwind and that they
continue to be a shareholder of Tailwind. Unless Tailwind determines to increase the gross
proceeds of the Private Placement, if subscriptions received for the Private Placement based on
all available exemptions exceed the maximum amount of $ 1,500,000, Tailwind Common Share
will be allocated pro rata among all subscribers qualifying under all available exemptions.
In accordance with the requirements of the Investment Dealer Exemption, Tailwind confirms
there is no material fact or material change related to Tailwind which has not been generally
disclosed. Any existing holders of Common Shares interested in participating in the Private
Placement should contact Tailwind using the contact information set forth at the end of this news
release.
Waiver from Sponsorship
Tailwind has applied to the TSXV for a waiver from the sponsorship requirement.
About the Transaction
The Amalgamation Agreement contemplates Tailwind and Kairos completing a non -arm's length
business combination transaction by way of amalgamation pursuant to the Business
Corporations Act (Alberta) to continue as a new company, the Resulting Issuer. Each one and a
half (1.5) Tailwind Common Shares that is outstanding immediately prior to the Amalgamation
(other than Tailwind Common Shares held by shareholders of Tailwind (the " Tailwind
Shareholders") who exercise their dissent rights) shall be converted into one (1) issued and fully
paid and non -assessable common shares in the share capital of the Resulting Issuer (the
"Resulting Issuer Shares") at a deemed price of $0. 10 per Resulting Issuer Share. Each Kairos
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Common Share that is outstanding immediately prior to the Amalgamation (other than Kairos
Common Shares held by shareholders of Kairos (the "Kairos Shareholders") who exercise their
dissent rights) shall be converted one (1) issued and fully paid and non -assessable Resulting
Issuer Shares at a deemed price of $0.10 per Resulting Issuer Share.
Assuming there are no dissenting Tailwind Shareholders or dissenting K airos Shareholders and
that the Private Placement is fully subscribed, there will be: (i) approximately 41,314,323
Resulting Issuer Shares issued and outstanding; (ii) the former Tailwind Shareholders will hold
5,333,333 Resulting Issuer Shares immediately following completion of the Amalgamation,
representing approximately 12.91% of the issued and outstanding Resulting Issuer Shares; (ii i)
former Kairos Share holders will hold 25,266,704 Resulting Issuer Shares, representing
approximately 61.16% of the issued and outstanding Resulting Issuer Shares; and (iv) investors
in the Private Placement will hold 10,714,286 Resulting Issuer Shares , representing
approximately 25.963% of the of the issued and outstanding Resulting Issuer Shares.
The Resulting Issuer Shares to be issued pursuant to the Amalgamation will be issued pursuant
to exemptions from the prospectus requirements of applicable securities legislation and certain of
the Resulting Issuer Shares issued to insiders of Kairos will be subject to escrow conditions, as
required by the TSXV.
Tailwind expects that the Amalgamation will result in the Resulting Issuer being a Tier 2 Mining
Issuer on the TSXV. It is intended that the net proceeds from the Transaction and Private
Placement w ill be used for the exploration of Salvadora Cu -Au Project and general working
capital following completion of the Transaction.
Interest of Insiders
Al J. Kroontje, a director and insider of Tailwind and President, Chief Executive Officer, insider
and a director of Kairos, holds 1,900,000 Tailwind Common Shares (representing 23.75% of the
issued and outstanding Tailwind Common Shares), 253,333 Tailwind stock options and
2,811,750 Kairos Com mon Shares (representing 11.13% of the issued and outstanding Kairos
Common Shares). As a result, the Amalgamation constitute s a Non-Arm's Length Qualifying
Transaction (as defined by the policies of the TSXV) and a business combination under
Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special
Transactions. The Amalgamation must be approved by not less than 66 2/3% of the votes cast at
the meeting (the " Tailwind Meeting") of Tailwind Shareholders and 662/3% of the votes cast at
the meeting (the " Kairos Meeting") of Kairos Shareholders . In addition, "Majority of the
Minority" approval will be required from disinterested Tailwind Shareholders and the
disinterested Kairos Shareholders . A joint management information circular will be provided to
Tailwind Shareholders and Kairos Shareholders in due course.
Conditions to Completion of the Transaction
The completion of the Amalgamation contemplated by the Amalgamation Agreement is subject
to certain conditions, including (a) obtaining all necessary regulatory approvals, including TSXV
approval of the Amalgamation, the Private Placement and other matters comprising part of the
Amalgamation; (b) the approval by the Tailwind Shareholders and the Kairos Shareholders of
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the Amalgamation; and (c) other customary conditions. There can be no assurance that all of the
necessary regulatory and shareholder approvals will be obtained.
Proposed Management and Board of Directors of the Resulting Issuer
Upon completion of the Transaction, it is anticipated that the persons identified below will serve
as directors and officers of the Resulting Issuer.
Ken Booth – President, Chief Executive Officer and Director
Mr. Booth is a geologist with an MBA and has more than 35 years of experience in exploration,
mining corporate finance and public mineral company administration . Over the years he has
been a director of numerous public mineral exploration companies and has chaired both audit
and compensation committees. In min ing corporate finance, he has worked for two of Canada’s
largest investment banks executing numerous equity financings for both junior and senior
companies and was involved in a variety of significant mergers and acquisitions. While working
for resource companies, Ken Booth has held several positions including Chief Executive Officer
and vice-president of corporate development. In these roles he was instrumental in raising equity
funding and negotiating property acquisitions and joint ventures.
Al J. Kroontje – Director
Mr. Kroontje is the President of Tailwind Capital Partners Inc. Mr. Kroontje has been involved
with numerous corporate start-ups and corporate restructurings. Mr. Kroontje holds a Bachelor of
Science degree (Chemical Engineering) from the University of Waterloo, Ontario. Mr. Kroontje
also holds a P. Eng . designation from the Association of Professional Engineers and Geologists
of Alberta but is currently a non-practicing engineer.
Mr. Kroontje currently or in the past has served as a Director and Officer of several public
companies listed on the TSX, TSX Venture or the NEX board of TSX Venture.
Kevin R. Baker, Q.C. –Director
Kevin R. Baker, Q.C. has extensive experience managing corporate start-ups, including
management experience in relation with operations, corporate securities and initial public
offerings. Mr. Baker serves as the President of Baycor Capital Inc., a private merchant bank with
its head office in Calgary, Alberta, which he has been with since it was fou nded in 1990.
Additionally, Mr. Baker is Chairman and CEO of ConleyMax Inc., a private oilfield services
company. Mr. Baker is also currently a Director of Calfrac Well Services Ltd., a public company
listed on the Toronto Stock Exchange (“ TSX”), and was t he President and CEO of Northern
Spirit Resources Inc. (now Altura Energy Inc.), a public company listed on the TSXV, and
Loncor Resources Inc., a public company listed on the TSX.
Mr. Baker holds a Bachelor of Arts degree and a Bachelor of Laws degree (L LB) all from the
University of Alberta. Mr. Baker has been a member of the Law Society of Alberta since 1972.
In 1993 Mr. Baker was appointed Queen’s Counsel.
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Mr. Baker has served on the boards of a number of exploration and production companies and a
number of oilfield service companies.
Terence Walker– Director and Vice President, Exploration
Mr. Walker is a professional geologist with over 52 years of experience in mineral exploration in
12 countries. Mr. Walker resides in the city of La Serena, C hile. He has a BSc. (Geology) from
the London School of Mines and a MSc. (Geology) from McGill University in Montreal, Quebec
and holds P. Geo. from the Association of Professional Engineers and Geologists of British
Columbia.
John F. K. Aihoshi – Chief Financial Officer
Mr. Aihoshi is currently the Chief Financial Officer of N7 Exploration Ltd., an Alberta -based oil
and gas company. Formerly, Mr. Aihoshi was the Chief Financial Officer of Border Petroleum
Ltd. and Canflame Energy Ltd. and prior the reto was the Corporate Controller of Enseco Energy
Services Partnership. Mr. Aihoshi holds a Business Diploma from the Southern Alberta Institute
of Technology and a Logistics Lieutenant designation from the Canadian Forces Officer
Candidate School. Mr. Ai hoshi also held a Chartered Professional Accountant designation until
December, 2015.
Jana Lillies – Corporate Secretary
Ms. Lillies is the controller for PetroFrontier Corp., an Alberta -based oil and gas company listed
on the TSXV and Chief Financial Officer of Big Dougie Capital Corp., an Alberta based mining
company listed on the TS XV. Prior thereto, Ms. Lillies was a directo r of ChaiNode
Opportunities Corp. (now Doré Copper Mining Corp.) and Chief Financial Officer of Elkwater
Resources, an oil and gas company listed on the TSXV, from 2000 until 2014. Ms. Lillies is the
Corporate Secretary of Lithium Chile Inc. and also provi des accounting and administrative
services through a private consulting firm in Calgary. Over the past 10 years, Ms. Lillies has
been a director of several capital pool companies listed on TSXV that completed their Qualifying
Transactions.
Ms. Lillies comp leted an Applied Bachelor of Business Administration Degree (Accounting)
from Mount Royal University and holds a CGA, CPA designation.
Qualified Person
The technical information contained in this new s release has been reviewed and approved by
Eric L. Hanso n, P. Geo , an independent "Qualified Person" within the meaning of National
Instrument 43-101 – Standards of Disclosure for Mineral Projects.
Information Circular
In connection with the Transaction and pursuant to TSXV requirements, Tailwind and Kairos
will file a joint information circular on SEDAR ( www.sedar.com), which will contain details
regarding the Transaction, the Amalg amation, the Private Placement, Kairos, Tailwind and the
Resulting Issuer.
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This press release does not constitute an offer to sell or the solicitation of an offer to buy any
securities in any jurisdiction.
ANY SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 (THE “1933 ACT”) AND
MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO A U.S. PERSON IN
THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT AND APPLICABLE U.S. STATE
SECURITIES LAWS. THE ISSUER WILL NOT MAKE ANY PUBLIC OFFERING OF THE
SECURITIES IN THE UNITED STATES.
The information contained or referred to in this press release relating to Kairos has been
furnished by Kairos. Although Tailwind has no knowledge that would indicate that any statement
contained herein concerning Kairos is untrue or incomplete, neither Tailwind nor any of its
respective directors or officers assumes any responsibility for the accuracy or completeness of
such information.
The information contained or referred to in this press release relating to Tailwind has been
furnished by Tailwind. Although Kairos has no knowledge that would indicate that any statement
contained herein concerning Tailwind is untrue or incomplete, neither Kairos nor any of its
respective directors or officers assumes any responsibility for the accuracy or completeness of
such information.
Cautionary Note Regarding Forward-Looking Statements
This news release includes certain "forward -looking statem ents" under applicable Canadian
securities legislation. Forward-looking statements include, but are not limited to, statements with
respect to: the terms and conditions of the proposed Transaction; the terms and conditions of the
proposed Private Placement; use of proceeds from the Private Placement ; and the business and
operations of the Resulting Issuer after the proposed Transaction. Forward-looking statements
are necessarily based upo n 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 gold and copper; and the results of current
exploration. 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. Tailwind
and Kairos 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.
Completion of the Transaction is subject to a number of conditions, including but not limited to,
TSXV approval and, if applicable pursuant to TSXV requirements, majority of the minority
shareholder approval. Where applicable, the Transaction cannot close until the required
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shareholder approval is obtained. There can be no assurance that the 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 prep ared in connection with the Transaction, any information released or
received with respect to the 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 Transaction and has neither approved nor
disapproved the content of this press release.
For further information, please contact:
Tailwind Capital Corporation Kairos Metals Corp.
Kevin R. Baker, Q.C. Al J. Kroontje
President and Chief Executive Officer Interim President and Chief Executive Officer
Telephone: (403) 476-7010 Telephone: (403) 607-4009
Email: [email protected] Email: [email protected]
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined
in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this news release.