From vegan producer to copper explorer
Komo enters LOI with Crestfield for reverse takeover
2024-02-10 02:46 ET - News Release
Mr. William White reports
KOMO PLANT BASED FOODS INC. ENTERS INTO RTO AGREEMENT
On Feb. 8, 2024, Komo Plant Based Foods Inc. entered into a binding letter of intent with Crestfield Copper Inc., outlining the terms of a proposed reverse takeover transaction. Upon completion, the transaction will result in Crestfield becoming a wholly owned subsidiary of Komo, and Komo will change its name and adopt the business of Crestfied. Crestfield's shareholders will exchange 100 per cent of the issued and outstanding common shares of Crestfield for common shares of Komo.
Crestfield is a private B.C. corporation in the business of acquiring, exploring and developing mineral resource properties. Crestfield currently holds the exclusive option to purchase a 100-per-cent interest in and to a group of mining claims on federal land and a certain mineral exploration permit from the Arizona State Land Department mining claims known as the Cruce copper-gold project located in Arizona, United States. Crestfield is also in the process of acquiring a copper-gold project in Canada.
The transaction is intended to be executed through a share exchange, arrangement, amalgamation or such other structure as agreed upon by both parties, with the primary goal of minimizing negative tax implications and aligning with strategic business objectives. The completion of the transaction is subject to the determination of an appropriate structure, due diligence by both parties, regulatory approvals, the sale of the company's operating subsidiary, regulatory approvals including the approval of the Canadian Securities Exchange, amendment or conversion of existing debentures on terms satisfactory to Crestfield, and other customary closing conditions.
The mutual due diligence period ends on Feb. 25, 2024, with the aim of finalizing a long-form agreement by March 1, 2024. The closing of the transaction is anticipated no later than May 15, 2024, subject to satisfaction of all closing conditions.
Financing
Prior to closing, the parties must raise a minimum of $2-million through the issuance of non-flow-through units at a price of 40 cents per unit and flow-through shares at a price of $1 per share. Finders' fees of 8 per cent in cash and 8 per cent in warrants to purchase common shares at 40 cents per share will be payable to finders pursuant to the financing. No other finders' fees are payable with respect to the transaction.
Fundamental change
Upon completion, the transaction is expected to constitute a fundamental change as defined by the CSE, requiring exchange approval and potentially the approval of Komo shareholders.
Non-arm's-length transaction
William White, who is the chief executive officer, president and director of the company, is also a director and shareholder of Crestfield. The transaction will be a related-party transaction and may require compliance with Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions).
Share consolidation
As part of the transaction, the company will consolidate its outstanding share capital at the ratio of one common share of the company for every 20 existing company common shares. All outstanding convertible securities of the company shall correspondingly be adjusted.
Further details regarding the transaction, including the consolidation ratio and the final structure, will be disclosed in subsequent communications as they become finalized.
About Komo Plant Based Foods Inc.
The company's subsidiary, Komo Plant Based Comfort Foods Inc., previously operated a premium plant-based food company that develops, manufactures and sells a variety of plant-based frozen meals.
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