TORONTO, ONTARIO--(Marketwired - Oct. 6, 2016) -
NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE U.S.
Santa Maria Petroleum Inc. (the "Company") (NEX:SMQ.H) is pleased to announce that it has entered into a
non-binding letter of intent dated October 6, 2016 (the "Letter of Intent") in respect of a proposed arm's
length merger transaction with Kalytera Therapeutics, Inc. ("Kalytera") that would result in a reverse takeover
of the Company by Kalytera (the "Proposed Transaction"), subject to approval of the TSX Venture Exchange
("TSXV") to list the shares of the resulting entity (the "Resulting Issuer") on the TSXV, among
other conditions. The Resulting Issuer will operate as a life sciences issuer continuing the business of Kalytera.
About Kalytera Therapeutics
Kalytera is advancing a portfolio of non-psychoactive cannabinoid and endocannabinoid-like medicines. Preclinical studies
support the continued investigation of Kalytera drug candidates in a range of important unmet market needs, including bone
fracture healing, osteogenesis imperfecta, osteoporosis, and osteoporosis in Prader-Willi syndrome.
Kalytera drug candidates include cannabidiol ("CBD"), a natural non-psychoactive cannabis constituent which
Kalytera plans to deliver using novel methods; KAL436/439, proprietary synthetic derivatives of CBD that have been structurally
modified to improve potency; and KAL671, a proprietary form of the free fatty acid oleoyl-alphamethyl-serine.
Kalytera is advancing its drug candidates through a research partnership with Yissum Research Development Company of the
Hebrew University of Jerusalem Ltd. ("Yissum") and with Ramot at Tel Aviv University ("Ramot"),
with multiple preclinical studies underway or planned. Kalytera believes that the research being undertaken by Yissum and Ramot
may enable it to file Investigational New Drug applications with the U.S. Food and Drug Administration.
Kalytera's leadership includes Dr. Raphael Mechoulam, a pioneer in the field of cannabis research and the discoverer of the
endocannabinoid system, and Dr. Robert S. Langer, a prolific biotechnologist, engineer, and inventor who is widely recognized in
biotechnology, especially in the field of drug delivery systems. Kalytera is a corporation organized under the laws of the State
of Delaware, U.S. with its headquarters in Manhattan Beach, California. For additional information, visit: http://kalytera.co.
Proposed Transaction
The Letter of Intent provides that the Company and Kalytera will negotiate and enter into a definitive agreement in respect of
the Proposed Transaction on or before October 24, 2016 (the "Definitive Agreement").
Pursuant to the terms of the Letter of Intent, completion of the Proposed Transaction will be subject to a number of
conditions, including completion of an Offering (described below), shareholder approval, if required, completion or waiver of
sponsorship, receipt of all required regulatory approvals, including the approval of the TSXV, completion of satisfactory due
diligence reviews, satisfaction of the initial listing requirements of the TSXV and all requirements under the policies of the
TSXV relating to the completion of the Proposed Transaction, and execution of the Definitive Agreement.
The Company and Kalytera will complete the Proposed Transaction by way of a share exchange, amalgamation, arrangement, share
purchase, or other form of transaction which would result in Kalytera becoming a wholly-owned subsidiary of the Company or
otherwise combine its corporate existence with a wholly-owned subsidiary of the Company. Once the Proposed Transaction structure
is determined, the Letter of Intent will be superseded by the Definitive Agreement. Following completion of the Proposed
Transaction, the combined company will hold all of Kalytera's assets and conduct the business of Kalytera.
In connection with the Proposed Transaction and for a period ending 12 months following the completion of the Proposed
Transaction, each of the shareholders of Kalytera, including current directors, officers and insiders of Kalytera, will enter
into lockup agreements restricting trading of their shares of the Resulting Issuer. The anticipated completion date for the
Proposed Transaction is December 15, 2016.
A filing statement or management information circular, as applicable, will be prepared and filed in accordance with the
policies of the TSXV.
Financing
As a condition to the completion of the Proposed Transaction, it is anticipated that Kalytera will complete a brokered
subscription receipt financing, through a syndicate of agents led by Clarus Securities Inc. ("Clarus"), for
aggregate gross proceeds of up to $6,000,000 through the issuance of subscription receipts ("Subscription
Receipts") at a price of $0.40 per Subscription Receipt (the "Offering"), subject to the rules of, and
approval by, the TSXV. Upon satisfaction of the escrow release conditions, including all conditions precedent to the Proposed
Transaction being satisfied, each Subscription Receipt will automatically convert without any further action on the part of the
holder into one (1) common share of the Resulting Issuer ("Resulting Issuer Shares"). Should the escrow release
conditions not be satisfied, the Subscription Receipts will be cancelled and all proceeds from the sale of Subscription Receipts
will be returned to subscribers without interest.
As compensation for the services provided in connection with the Offering, Clarus will receive a cash commission equal to 7%
of the gross proceeds raised in connection with the Offering and broker warrants equal to 7% of the Resulting Issuer Shares.
Upon completion of the Proposed Transaction, the proceeds of the Offering will be used to further develop the business of the
Resulting Issuer and for general working capital purposes.
Sponsorship
Sponsorship of the Proposed Transaction may be required by the TSXV unless an exemption or waiver from this requirement can be
obtained in accordance with the policies of the TSXV. The Company intends to apply for a waiver of the sponsorship requirement.
There is no assurance that a waiver from this requirement can or will be obtained.
Additional Information
The common shares of the Company are currently halted from trading pending completion of the Proposed Transaction.
A comprehensive press release with further particulars relating to the Proposed Transaction, financial particulars and
descriptions of the proposed board of directors and management of the Resulting Issuer will follow in accordance with the
policies of the TSXV.
All information contained in this press release with respect to the Company and Kalytera was supplied by the parties
respectively, for inclusion herein, and each party and its directors and officers have relied on the other party for any
information concerning the other party.
The common shares of the Company have not been and will not be registered under the United States Securities Act of 1933,
as amended and may not be offered or sold in the United States absent registration or an applicable exemption from the
registration requirement. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor
shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be
unlawful.
Cautionary Note
Completion of the Proposed Transaction is subject to a number of conditions including, but not limited to, completion of
satisfactory due diligence, completion of the Offering, execution of the Definitive Agreement in respect of the Proposed
Transaction, TSXV acceptance and, if applicable, pursuant to policies of the TSXV, majority of the minority shareholder approval.
Where applicable, the Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no
assurance that the Proposed 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 Proposed Transaction, any information released or received with respect to the Proposed
Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of the Company should be
considered highly speculative.
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) has in
any way passed upon the merits of the Proposed Transaction and associated transactions and neither of the foregoing entities has
in any way approved or disapproved of the contents of this press release.
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the 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 the
Proposed Transaction including statements regarding the terms and conditions of the Proposed Transaction and the Letter of
Intent, as well as information relating to Kalytera. The information about Kalytera contained in the press release has not been
independently verified by the Company. Although the Company believes in light of the experience of its officers and directors,
current conditions and expected future developments and other factors that have been considered appropriate, that the
expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because
the Company can give no assurance that they will prove to be correct. Readers are cautioned to not place undue reliance on
forward-looking information. Actual results and developments may differ materially from those contemplated by these statements
depending on, among other things, the risks that the parties will not proceed with the Proposed Transaction and the Letter of
Intent; that the ultimate terms of the Proposed Transaction and the Letter of Intent will differ from those that currently are
contemplated; and that the Proposed Transaction and the Letter of Intent will not be successfully completed for any reason
(including the failure to obtain the required approvals or clearances from regulatory authorities). The terms and conditions of
the Proposed Transaction may change based on the Company's due diligence and the receipt of tax, corporate and securities law
advice for both the Company and Kalytera. The statements in this press release are made as of the date of this release. The
Company undertakes no obligation to comment on analyses, expectations or statements made by third-parties in respect of the
Company, Kalytera, their securities, or their respective financial or operating results (as applicable).