JES.P Jesmond Capital Ltd

/NOT FOR DISTRIBUTION OR DISSEMINATION IN THE UNITED STATES. FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF UNITED STATES SECURITIES LAWS./

CALGARY, AB, Feb. 13, 2023 /CNW/ - Jesmond Capital Ltd. (TSXV: JES.P) ("Jesmond" or the "Company") is pleased to announce proposed non-brokered private placements for minimum gross proceeds of CAD$6.0 million and maximum gross proceeds of CAD$8.5 million (collectively, the "Private Placements").

These Private Placements are being completed in conjunction with the previously announced proposed "Qualifying Transaction" (the "Transaction") pursuant to the policies of the TSX Venture Exchange (the "Exchange"), with the result that the Company will acquire Quattro Energy Limited ("Quattro"). Upon completion of the Transaction, the combined entity (the "Resulting Issuer") will continue the business of Quattro and will be engaged in building a portfolio of international oil and gas producing assets, with its initial focus on Seaward Production Licence No. P2519 (the "P2519 Licence"), which includes Blocks 15/18e and 15/19c and covers an area of c. 225 km² in the Outer Moray Firth Basin, a highly prospective area with development potential of the United Kingdom Central North Sea, close to existing producing infrastructure.  Quattro has entered into an agreement to acquire the P2519 Licence concurrently with the completion of the Transaction.  See Jesmond's January 17, 2023 press release for additional information.

Equity Private Placement

The Company is proposing a non-brokered private placement of 12,000,000 subscription receipts of the Company ("Equity Subscription Receipts") at a price of CAD$0.25 per Equity Subscription Receipt for gross proceeds of CAD$3.0 million (the "Equity Private Placement"). The gross proceeds from the sale of the Equity Subscription Receipts will be held in escrow pending satisfaction or waiver of the escrow release conditions set forth in the applicable subscription receipt agreement described below.

Each Equity Subscription Receipt will be deemed to be automatically converted, without payment of additional consideration or further action by the holder thereof, into one (1) common share of the Company, subject to adjustment in certain events, immediately before the closing of the Transaction upon the satisfaction or waiver of the aforementioned escrow release conditions.

Convertible Debenture Private Placement

The Company is also proposing a non-brokered private placement of a minimum of 3,000 and a maximum of 5,500 subscription receipts of the Company ("Debenture Subscription Receipts") at a price of CAD$1,000 per Debenture Subscription Receipt for gross proceeds of a minimum of CAD$3.0 and a maximum of CAD$5.5 million (the "Convertible Debenture Private Placement"). The gross proceeds from the sale of the Debenture Subscription Receipts will be held in escrow pending satisfaction or waiver of the escrow release conditions set forth in the applicable subscription receipt agreement described below.

Each Debenture Subscription Receipt will be deemed to be automatically converted, without payment of additional consideration or further action by the holder thereof, into an unsecured convertible debenture of the Company in the principal amount of $1,000 (the "Convertible Debentures"), subject to adjustment in certain events, immediately before the closing of the Transaction upon the satisfaction or waiver of the aforementioned escrow release conditions.

The Convertible Debentures will have an absolute term of eighteen (18) months from the date of issuance with conversion available at the discretion of the Resulting Issuer or the holder of Convertible Debentures in the circumstances described below. The Convertible Debentures will automatically convert at the end of the eighteen (18) month term (the "Automatic Conversion") and in no circumstances may the Convertible Debentures be surrendered or redeemed for cash.

The Convertible Debentures will be convertible at a rate of CAD$0.25 per share (4,000 common shares of the Resulting Issuer per $1,000 of Convertible Debenture face value). The holder of the Convertible Debentures will be entitled to convert their Convertible Debentures at any time from twelve (12) months from the date of issuance. The Resulting Issuer will be entitled to force the conversion of the Convertible Debentures at any time following the issuance of the Convertible Debentures in any of the following events:

The Convertible Debentures will bear interest only if not converted within the period of twelve (12) months from the date of issuance.  If not converted within the first twelve (12) months from the date of issuance, interest will be payable on the Convertible Debentures from the date of issuance until the Convertible Debentures are converted (whether by the Resulting Issuer, the holder thereof or upon Automatic Conversion, as applicable) at an interest rate of 10% per annum, and subject to Exchange approval, such interest will be payable in common shares of the Resulting Issuer (pro-rated) based on the last closing price of the common shares of the Resulting Issuer before the time the accrued interest becomes payable ( being the "Market Price" as defined by the Policies of the Exchange).

Subscription Receipt Agreements

Each of the Equity Subscription Receipts and Debenture Subscription Receipts (collectively, "Subscription Receipts") will be created and issued pursuant to the terms of a subscription receipt agreement between a subscription receipt agent and the Company. The escrow release conditions for the Subscription Receipts will be set forth in the applicable subscription receipt agreement and will provide that if such escrow release conditions are not satisfied at or before the date that is 120 days from the closing of the applicable Private Placement, then the Subscription Receipts will immediately become null and void and the subscription receipt agent shall distribute the escrowed proceeds to the holders of the Subscription Receipts, together with their pro rata share of interest earned thereon.

Other Information Regarding the Private Placements

The net proceeds of the Private Placement will be used to acquire the P2519 Licence, develop the business of the Resulting Issuer and for general working capital purposes.

The Private Placements are expected to close in Q1 2023; however, completion is subject to certain conditions, including approval of the Exchange. The Subscription Receipts (and underlying securities) issued in the Private Placements will be subject to a statutory four-month hold period.

A cash finder's fee of up to 6% of the gross proceeds raised in connection with the Private Placements and/or that number of finder's warrants equal to up to 6% of the number of common shares issued in connection with the Private Placements, with each finder's warrant being exercisable into one common share of the Resulting Issuer at a price of $0.25 per share, may be paid to eligible parties in connection with the Private Placements, subject to the approval of the Exchange and compliance with applicable securities laws.

Proposed Name Change

In connection with the Transaction, it is proposed that Jesmond complete a name change to "Quattro Energy Corp." or another name as the Board of Directors of Jesmond deems appropriate and as is acceptable to the Exchange and regulators having jurisdiction over Jesmond (the "Name Change").  A special resolution for the approval of the Name Change is being put to shareholders of Jesmond for consideration at the annual and special meeting of shareholders of Jesmond currently scheduled for March 8, 2023.  The Company has also reserved the ticker symbol "QTRO" with the Exchange in connection with such proposed Name Change.

Further Information

Jesmond will issue additional news releases related to the Transaction, the Private Placements, sponsorship and other material information as it becomes available.

All information in this press release relating to Quattro and the P2519 Licence has been provided by Quattro and is the sole responsibility of Quattro.

Completion of the Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, the Transaction cannot close until the required 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 prepared 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 TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this news release.

Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This press release is not an offer of the Company's securities for sale in the United States. The Company's securities may not be offered or sold in the United States absent registration or an available exemption from the registration requirements of the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act") and applicable U.S. state securities laws. The Company will not make any public offering of its securities in the United States. The Company's securities have not been and will not be registered under the U.S. Securities Act.

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 these securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain "forward-looking statements" under applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to the structure, terms, conditions and proposed timing for completion of the Transaction, the Licence Acquisition and the Private Placements; the ability of Jesmond and Quattro to complete the Transaction and the Private Placements; the ability of the Quattro to complete the Licence Acquisition; the use of proceeds of the Private Placements; the Resulting Issuer's future business operations and results; the receipt of all necessary shareholder, Exchange, securities regulatory authority and other third party consents and approvals; and the receipt by Jesmond of an exemption from the sponsorship requirements of the Exchange. Forward-looking statements are necessarily based upon 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 shareholder or regulatory approvals; and the results of continued development, marketing and sales. 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. Jesmond disclaims any intention or obligation to update or revise any forward-looking statements, whether because of new information, future events or otherwise, except as required by law.

(Not for dissemination in the United States of America)

SOURCE Jesmond Capital Ltd.