CALGARY, ALBERTA--(Marketwire - Oct. 17, 2012) - Solara Exploration Ltd (TSX VENTURE:SAA.A) ("Solara") and Verity Energy Ltd ("Verity") advise that they have entered into an Engagement Agreement and Term Sheet with a syndicate of agents led by Burgeonvest Bick Securities Limited, along with Octagon Capital Corp. and Global Securities Corp. (the "Agents") with respect to the previously announced Private Placement for the new company to be created by the amalgamation of Solara and Verity to be named Corso Energy Ltd. (the "Company"). The parties have agreed to provide two financing products comprised of $5,000,069 of Subscription Receipts for the previously announced Units of Common Shares and Warrants and $6 million of Convertible Subordinated Debenture Subscription Receipts. The Private Placement of Units and Debentures will be completed by Subscription Receipts of Verity prior to the amalgamation of Verity and Solara and will result in the issuance of free trading securities following the amalgamation of the two companies. The Amalgamation is subject to TSX Venture Exchange approval, regulatory and shareholder approval and other conditions as set out in the Amalgamation Agreement, including Corso having the required amount of working capital after completion of the financings.
In addition to the Private Placement of Units of Common Shares and Purchase Warrants, Solara and Verity advise that they have added a new offering of Convertible Subordinated 8.5% Debentures for up to $6 million (the "Debentures"). The Debentures will be in denominations of $1,000, have a maturity date of October 31, 2015 and yield 8.5% per annum, which is payable quarterly. Each Debenture will be convertible at the option of the holder at any time up to maturity into 2,568 Common Shares of Verity (4,547 Common Shares of Corso at $0.22 per share). The Debentures will be redeemable at the option of the Company at any time after 18 months from the date of issuance, provided that, the Company redeems the Debentures at a redemption amount of $1,050 per Debenture and if the average trading price of the Company exceeds $0.30 for twenty (20) consecutive trading days prior to the notice date of Corso's intention to redeem.
With respect to the Subscription Receipts for Common Shares and Warrants, each $1,000 Subscription Receipt will be comprised of 2,824 Common Shares of Verity and 2,824 Warrants each priced at $0.3541 (5,000 Common Shares of Corso and 5,000 Corso Warrants). The minimum subscription amount is $5,000. When converted into securities of the newly amalgamated company, the Company will issue up to $5,000,069 of Units at a price of $0.20 per Unit with each Unit comprised of one (1) Common Share and one (1) Common Share Purchase Warrant. Each whole Warrant together with $0.3541 in the case of Verity and $0.20 in the case of Corso is exercisable into one (1) Common Share until June 30, 2014.
Solara and Verity also advise that their Joint Information Circular and proxy materials with respect to the proposed amalgamation of the companies were mailed to shareholders on September 24, 2012. The shareholders meetings are scheduled for October 24, 2012 at the Petroleum Club, 319 - 5th Ave SW, Calgary, Alberta with Verity's meeting at 9:00 a.m. and Solara's meeting at 10:00 a.m. (Calgary time). All shareholders of both companies are invited to attend the meetings, where the proposed new management of Corso will provide a presentation with respect to the plans for the company.
Completion of the Amalgamation is subject to a number of conditions, including but not limited to, TSX Venture Exchange acceptance and shareholder approval of Solara and Verity. The Amalgamation cannot close until the required shareholder approval is obtained. There can be no assurance that the Amalgamation will be completed as proposed or at all.
This news release may contain certain forward-looking statements, including management's assessment of future plans, acquisitions and operations, and capital expenditures and the timing thereof, that involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company's control. Such risks and uncertainties include, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada, the United States and overseas, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. The Company's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward- looking statements will transpire or occur, or if any of them do so, what benefits, including the amount of proceeds, that the Company will derive therefrom. Readers are cautioned that the foregoing list of factors is not exhaustive. All subsequent forward-looking statements, whether written or oral, attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
108,710,732 Class A Common Shares
Neither the 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 release.