Avila Energy Corporation (CSE:VIK)
("
Avila" or the "
Company")
announces the signing of a preliminary non-binding Letter of Intent
(the “
LOI”) with Insight Acquisition Corp.
(“
IAC”), a Delaware corporation and a Special
Purpose Acquisition Company, pursuant to which IAC has agreed to
combine with the Company in a transaction that assumes an
enterprise value of the combined company of U.S. $185,280,000 and
will result in the combined company being publicly listed for
trading on a major stock exchange in the United States, subject to
exchange approval (the “
Transaction”). The
Transaction remains subject to the approval of the boards of
directors and stockholders of each of IAC and the Company, as well
as other customary closing conditions, including negotiation and
execution of a definitive business combination agreement for the
Transaction (the “
Definitive Business Combination
Agreement”), which may or may not occur. The parties to
the LOI have agreed to negotiate the terms of a Transaction,
including a Definitive Business Combination Agreement, on an
exclusive basis through February 24, 2023, at which point IAC may
extend such term for an additional 15 calendar days. The parties
may also further extend such term on a mutually agreeable basis.
While non-binding and subject to change, the LOI
contemplates terms of the Transaction which may include:
-
The Company or a newly-formed company affiliated with the Company
will combine with IAC so that all of the issued and outstanding
securities of the Company and IAC will be exchanged for shares of
the Surviving Company (as defined below) based on a fully diluted
enterprise value of the Surviving Company of U.S. $185,280,000. The
Transaction, which will constitute the de-SPAC transaction of IAC,
is expected to close later this year (the
“Closing”).
-
There are 111,437,322 issued and outstanding Class A common shares
of the Company (basic) and 185,725,972 common shares
(“Company Shares”) outstanding on a fully-diluted
basis (assuming the planned conversion of all currently-outstanding
warrants, convertible securities and options of the Company).
-
The Transaction will create a surviving company (the
“Surviving Company”), the shareholders of which
will be composed of the then current shareholders of Avila and
shareholders and participating parties of IAC including Burkhan
LLC, and Insight Acquisition Sponsor LLC (the
“Sponsor”). The Sponsor is the current sponsor of
IAC.
-
IAC currently has approximately $241,200,000 in trust. In
connection with the Closing, the shareholders of IAC will be
entitled to seek redemption of any outstanding public shares, in
exchange for a pro rata portion of such trust proceeds. Any
proceeds that remain in trust following such redemption will be
available to the Surviving Company at the Closing.
-
It is anticipated that the current shareholders of Avila will,
excluding any additional financing that may be raised in connection
with the Transaction and before considering any redemption of the
IAC shareholders, hold approximately 68% of the issued shares of
the Surviving Company upon Closing of the Transaction.
-
No minimum cash condition or other required financing is expected
to be a condition to Closing the Transaction. However, the parties
may consider one or more financing alternatives, including a
convertible note financing, to provide additional working capital
for the Company following the Closing. In addition, Burkhan LLC is
expected to provide IAC with working capital funding at the time of
signing a Definitive Business Combination Agreement.
-
The final structuring of the Transaction shall be subject to
receipt of corporate, securities and tax advice for both Avila and
IAC and Closing of the Transaction shall be subject to successful
negotiation and signing of the Definitive Business Combination
Agreement and satisfaction of Burkhan LLC’s obligation to provide
Sponsor working capital funding at the time of signing and Closing
(the “Definitive Agreements”), as well as approval
by Canadian and US securities regulators, approval by the IAC
shareholders of an extension of the time by which they must
consummate an initial business combination, listing approval by a
United States exchange and approval by the boards of directors and
shareholders of IAC and Avila, as applicable.
-
The Board of Directors of the Surviving Company is expected to
consist of seven persons, five of which shall be appointed by
persons designated by Avila, including three independent directors,
and Leonard Van Betuw will remain the CEO and Chairman of the Board
of the Surviving Company.
-
Avila has agreed to fully cooperate with IAC in the preparation of
all documents required to be filed with the United States
Securities and Exchange Commission (including all exhibits and
amendments thereto), or any other regulatory body, in connection
with the Transaction; the intent being that following the Closing
the shares of the Surviving Company will be listed for trading on a
major stock exchange in the U.S.
-
As part of the Transaction, employment agreements are expected to
be entered into between current members of Avila management and the
Surviving Company, which will also provide for a grant of shares of
the Surviving Company to be made to certain persons (all to be
named and are to include employee executives, such as Leonard Van
Betuw) based on stock price performance on an earnout structure to
be agreed upon between the parties.
About Avila Energy
Corporation
The Company is an emerging CSE listed
corporation trading under the symbol (‘VIK’), and in combination
with an expanding portfolio of 100% Owned and Operated oil and
natural gas production, pipelines and facilities is a licensed
producer, explorer, and developer of energy in Canada. The Company,
through the implementation of a closed system of carbon capture and
sequestration and an established path underway towards the material
reduction of Tier 1, Tier 2 and Tier 3 emissions, continues to work
towards becoming a Vertically Integrated low-cost Carbon
Neutral Energy Producer. The Company continues to grow and
achieve its results by focusing on the application of a combination
of proven geological, geophysical, engineering, and production
techniques.
About Insight Acquisition
Corp.
Insight Acquisition Corp. (NYSE: INAQ) is a
special purpose acquisition company formed solely to effect a
merger, capital stock exchange, asset acquisition, stock purchase,
reorganization or similar business combination with one or more
businesses. Insight Acquisition Corp. is sponsored by Insight
Acquisition Sponsor LLC.
Contacts:
Insight Acquisition Corp.Cody Slach, Georg
VenturatosGateway Investor
Relations(949) 574-3860 INAQ@gatewayir.com
Avila EnergyRonnie Shporer,
Investor Relations, North America orPeter Nesveda, Investor
Relations, International orLeonard B. Van Betuw, President &
CEO of Avila Energy Corporation.
Emails: |
Ronnie
Shporer: |
ron.s@avilaenergy.com |
|
Peter Nesveda: |
peter@intuitiveaustralia.com.au |
|
Leonard B. Van Betuw: |
leonard.v@avilaenergy.com |
|
|
|
ON BEHALF OF THE BOARD
Leonard B. Van BetuwPresident & CEO
Cautionary and Forward-Looking Statements
Certain information set forth in this news
release contains "forward-looking statements" with respect to the
proposed business combination between the Company and IAC.
Forward-looking statements may generally be identified by the use
of words such as “believe,” “may,” “will,” “estimate,” “continue,”
“anticipate,” “intend,” “expect,” “should,” “would,” “plan,”
“project,” “forecast,” “predict,” “potential,” “seem,” “seek,”
“future,” “outlook,” “target” or other similar expressions (or the
negative versions of such words or expressions) that predict or
indicate future events or trends or that are not statements of
historical matters. Forward-looking statements are predictions,
projections, and other statements about future events that are
based on current expectations and assumptions and, as a result, are
subject to risks and uncertainties that could cause the actual
results to differ materially from the expected results. These
statements are based on various assumptions, whether or not
identified in this communication. These forward-looking statements
are provided for illustrative purposes only and are not intended to
serve as, and must not be relied on by an investor as, a guarantee,
an assurance, a prediction, or a definitive statement of fact or
probability. Many actual events and circumstances are beyond the
control of the Company and IAC.
All statements in this news release, other than
statements of historical facts, that address events or
developments that the Company expects to occur, are forward-looking
statements, including, but not limited to entrance into a Business
Combination Agreement, the occurrence of and the anticipated date
of closing of the Transaction, the availability of financing for
the Transaction and IAC at the time of signing, and the
post-Closing governance of the Surviving Company. By their nature,
forward-looking statements are subject to numerous risks and
uncertainties, some of which are beyond the Company’s and IAC’s
control, including completion of customary due diligence with
respect to the Transaction, negotiation of the definitive
documentation including the Business Combination Agreement,
approval of the Transaction by Company and IAC shareholders,
approval by the IAC shareholders of an extension of the time by
which they must consummate an initial business combination, listing
approval by a United States exchange and the impact of general
economic conditions, industry conditions, the regulatory
environment, volatility of commodity prices, currency fluctuations,
environmental risks, operational risks, competition from other
industry participants and stock market volatility. Although the
Company and IAC believe that the expectations in its
forward-looking statements are reasonable, its forward-looking
statements have been based on factors and assumptions concerning
future events which may prove to be inaccurate. Those factors and
assumptions are based upon currently available information. Such
statements are subject to known and unknown risks, uncertainties
and other factors that could influence actual results or events and
cause actual results or events to differ materially from those
stated, anticipated or implied in the forward-looking statements.
Accordingly, readers are cautioned not to place undue reliance on
the forward-looking statements, as no assurance can be provided as
to future results, levels of activity or achievements. Risks,
uncertainties, material assumptions and other factors that could
affect actual results are discussed in the Company’s public
disclosure documents available at www.sedar.com and IAC’s public
disclosure documents available through the EDGAR filing system at
www.sec.gov. Furthermore, the forward-looking statements contained
in this document are made as of the date of this document and,
except as required by applicable law, neither the Company nor IAC
undertake any obligation to publicly update or to revise any of the
included forward-looking statements, whether as a result of new
information, future events or otherwise. The forward-looking
statements contained in this document are expressly qualified by
this cautionary statement.
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