Sonora Gold & Silver Corp (TSXV:SOC) (the “Company” or “Sonora”) announced that it has entered into a letter of intent dated June 14, 2021 (the “LOI”) to complete a business combination (the “Transaction”) with BTQ AG, an arm’s length privately held company (“BTQ”).
BTQ was incorporated in the Principality of Liechtenstein on March 26, 2021 by a group of experienced post-quantum cryptographers with an interest in addressing the urgent security threat that a large-scale universal quantum computer poses to the Bitcoin network. Bitcoin’s store of value thesis, one that supports a crypto ecosystem of over $1 trillion in market capitalization, has several known quantum attack vectors that could compromise the network. This paradigm shift requires a new direction in cryptography and blockchain design. BTQ is building a portfolio of intellectual property to safeguard this asset class with energy efficient quantum processes and currently holds several patent applications for generating quantum algorithms.
About the Transaction
It is anticipated that the Transaction will be structured as a share acquisition pursuant to which Sonora will acquire all of the issued and outstanding securities of BTQ in accordance with a definitive agreement (the “Definitive Agreement”) to be signed on or before August 15, 2021 or such other date as agreed to by Sonora and BTQ.
Prior to closing of the Transaction, Sonora intends to complete a consolidation (the “Consolidation”) of its common shares on the basis of 1.71 common shares currently outstanding for one new common share (each, a “Consolidated Share”) and a private placement (the “Sonora Financing”) of 26.6 million subscription receipts (each, a “Subscription Receipt”) at a price of $0.15 per Subscription Receipt. Each Subscription Receipt will be exchanged for a Consolidated Share on closing of the Transaction.
Pursuant to the LOI, shareholders of BTQ will receive one Consolidated Share in exchange for each share of BTQ. It is expected that the company resulting from the completion of the transaction (the “Resulting Company”) will be named BTQ Technologies Corp., or such other name as acceptable to Sonora and BTQ, and will have a total of approximately 132.9 million common shares outstanding on a non-diluted basis, comprised of approximately 50.02 million Consolidated Shares representing the currently issued and outstanding shares of Sonora after the Consolidation, approximately 26.6 million Consolidated Shares representing the shares issued in exchange for the Subscription Receipts and 56 million Consolidated Shares representing the shares issued to security holders of BTQ pursuant to the Definitive Agreement.
Completion of the Transaction is subject to a number of conditions precedent, including but not limited to, due diligence, the negotiation and execution of the Definitive Agreement, the approval of the TSX Venture Exchange (the “TSXV”) of the Transaction and the listing of the Resulting Company as a Tier 2 Technology Issuer, receipt of necessary shareholder approvals and the completion of the Consolidation and the Sonora Financing. Accordingly, there can be no assurance that the Transaction will be completed on the terms disclosed or at all. It is expected that trading the Company’s shares will remain halted until the Transaction has been completed. The Company will issue a subsequent press release with the financial information of BTQ required under the policies of the TSXV.
About the Resulting Company
The Resulting Company will carry on the business of BTQ. Upon closing of the Transaction, the current directors and officers of Sonora will resign such that the directors and officers of the Resulting Company will be:
Olivier Roussy Newton, CEO and Chairman of the Board Olivier is the founder of HIVE Blockchain Technologies (TSXV:HIVE) and EIR and co-founder of DeFi Technologies (NEO:DEFI). He is currently the Managing Director of BTQ AG. He is also the founder of Latent Capital, an investment fund focused on quantum computing, financial technology and bioinformatics.
Chen-Mou Cheng, Director Chen-Mou is an associate professor at Kanazawa University and served as General Chair of PQCrypto’11, the flagship annual conference for the post-quantum crypto research community. He holds a PhD in computer science from Harvard University.
Ming-Yang Chih, Director Ming-Yang is the founder of Chelpis, a cryptography company that built the first post-quantum cryptocurrency hardware wallet. Previously he was a specialist at Quanta Computer (TPE: 2382). He holds a master’s degree in computer science from National Taiwan University.
Thomas Joseph Purtell, Director Thomas is the founder of MobiSocial, a venture backed Stanford spin out building video streaming technology for mobile gaming. He holds a BS in computer science from Massachusetts Institute of Technology and was a PhD candidate at Stanford University.
Charles Edwards, Director Charles Edwards is a senior cyber security specialist at Kudelski Security, a leading Swiss digital security company. He has extensive experience in satellite telecommunications and blockchain technology. He is a regular delegate of the World Economic Forum in Davos, Switzerland.
James Nguyen, Director James Nguyen is co-founder and CEO of Quantropi, a high-growth enterprise platform company that provides novel, end-to-end quantum-secure cryptographic & data communication solutions. He also successfully managed a diverse mid-market portfolio at RBC for over a decade. James is a graduate in Economics of Carleton University, and a 2021 Ottawa Board of Trade “Forty under 40” award recipient.
As the Transaction is expected to constitute a Change of Business pursuant to the policies of the TSXV, sponsorship of the Transaction will be required by the TSXV unless exempt therefrom in accordance with the TSXV’s policies or a waiver is obtained. In the absence of an available exemption from the sponsorship requirements, Sonora and BTQ intend to make an application to the TSXV for a waiver from sponsorship requirements. There is no assurance that if applied for, a waiver will be granted.
The Transaction will constitute an Arm’s Length Transaction in accordance with the policies of the TSXV.
Source: The Newswire