Amego Capital Corp. Announces Letter of Intent with Klarzen Green Technology LLC

Not for distribution to United States newswire services or for dissemination in the United States. Any failure to comply with this restriction may constitute a violation of U.S. securities laws.

VANCOUVER, BC / ACCESSWIRE / December 12, 2023 / Amego Capital Corp. (TSXV:MEGO.P) ("Amego" or the "Company") is pleased to announce that it has entered into a non-binding letter of intent ("LOI") dated December 9, 2023 to complete a reverse takeover (the "Transaction") with Klarzen Green Technology LLC ("Klarzen"). The Transaction will be an arm's length transaction, and, if completed, will constitute Amego's "Qualifying Transaction" (as such term is defined in Policy 2.4 - Capital Pool Companies ("Policy 2.4") of the TSX Venture Exchange (the "TSXV" or the "Exchange") Corporate Finance Manual (the "Manual")).

In connection with the Transaction, Amego and Klarzen will issue a subsequent news release setting out further information contemplated in Policy 2.4.

Trading of Amego's common shares has been halted in accordance with the policies of the TSXV and will remain halted until such time as all required documentation in connection with the Transaction has been filed with and accepted by the TSXV and permission to resume trading has been obtained from the TSXV. It is likely that trading in the Amego's common shares will not resume prior to the closing of the Transaction.

About Klarzen Green Technology LLC

Klarzen is a leading solar energy company duly incorporated under the laws of Florida, USA with operations in Latin America. Through engineering, procurement and construction services and direct to consumer Power Purchase Agreements ("PPAs"), Klarzen has developed and built over 40 solar energy projects in Colombia. In June, 2021, Klarzen entered into a Power Purchase Agreement with an international oil and gas producer to design, finance, produce, and install a 10 MWp solar energy system in Casanare, Colombia. The total investment in the PPA project exceeded US$8 million and electrical production commenced in November, 2022. Klarzen is a limited liability company existing under the laws of Tampa, Florida, which was formed on August 3, 2018.

To learn more, visit: https://www.klarzen.com.

Capitalization

Immediately prior to the share exchange contemplated by the Transaction, the authorized share capital of Amego consists of an unlimited number of common shares, of which: (a) no more than 5,591,152 common shares will be issued and outstanding; (b) no more than 367,500 options with a strike price of $0.20 per share will be issued and outstanding; and (c) no more than 150,000 broker warrants with a strike price of $0.20 will be issued and outstanding

Pursuant to the applicable steps of the Transaction, the equity capital of Amego and Klarzen will be reorganized as contemplated by the LOI, including:

1. existing holders of Amego's exercisable or convertible securities shall become holders of equivalent convertible securities of the Resulting Issuer;
2. Klarzen's security holder shall receive:
   1. an aggregate of 15,085,565 common shares of the Resulting Issuer ("Resulting Issuer Shares");
   2. a $500,000 promissory note with a term of 2 years from the closing date of the Acquisition (the "Closing Date") in accordance with Exchange policy;
   3. a $500,000 convertible debenture with a term of 2 years from the Closing Date, convertible into 1,428,571 common shares of Amego at a conversion price of $0.35 in accordance with Exchange policy; and
3. Amego shall become the sole registered and beneficial holder of all of the issued and outstanding securities of Klarzen.

Following the Transaction the Resulting Issuer will have approximately 21,226,717 common shares issued and outstanding, of which the shareholders of Amego will hold approximately 5,591,152 common shares (26.3%), the shareholders of Klarzen will have received approximately 15,085,565 common shares (71.1%), and the Finder (defined below) will have received approximately 550,000 common shares (2.6%) of the Resulting Issuer.

A portion of the Resulting Issuer Shares may be subject to escrow provisions which shall be imposed by the policies of the TSXV and/or applicable securities laws. If applicable, these escrowed securities will be held in escrow and released, over time, as determined by the TSXV and/or applicable securities laws.

Terms of the Transaction

The Transaction is expected to be completed by way of a share exchange, pursuant to which the sole proprietor of Klarzen will transfer all of the membership interest in Klarzen to Amego and, in exchange, Amego will issue common shares in the capital of Amego to such sole proprietor, pursuant to the laws of the Province of British Columbia. The publicly traded entity resulting from the Transaction is referred to as the "Resulting Issuer".

Pursuant to the terms and conditions of the LOI, Klarzen and Amego (each, a "Party", and collectively, the "Parties") have agreed to diligently and act in good faith to negotiate the terms and conditions of a definitive agreement (the "Definitive Agreement") incorporating the principal terms of the Transaction as described in the LOI, and in addition, such other terms and provisions of a more detailed nature as the Parties may agree upon and as are customary for transactions of this nature.

In the Definitive Agreement, each of Amego and Klarzen will make such representations and warranties as are customary in transactions of this nature including, without limitation, representations as to the power, authority and standing of such Parties to engage in the contemplated Transaction; the absence of material pending or, to the knowledge of the Parties, threatened litigation and liabilities (contingent or otherwise) affecting the business of any Party in relation to the Transaction; the absence of any material default by either of the Parties under the terms of any material contract; and the accuracy in all material respects of the information, contracts and other materials furnished by either of the Parties for review by the other Party. Specific reference herein to the foregoing representations will not preclude the Parties from requiring such additional representations from the other Party, as such Party may reasonably require in the Definitive Agreement.

The Parties intend to enter into the Definitive Agreement on or before January 8, 2024, or such other date as agreed to by the Parties.

In addition, either Party may terminate the LOI before entering into the Definitive Agreement if: (a) it is not reasonably satisfied with the results of its due diligence investigations of the other party or as to the legal or tax consequences of concluding the Transaction; (b) the Parties have not entered into the Definitive Agreement on or before January 8, 2024 or such other dates as the Parties have agreed in writing; or (c) if any law, regulation or judgement of a governmental authority of competent jurisdiction makes the completion of the Transaction or the transactions contemplated by the LOI illegal or otherwise prohibited, and such law has become final and non-appealable. The LOI is intended as an expression of mutual intention of the Parties to proceed towards negotiating the Definitive Agreement, provided that there is no assurance that a Definitive Agreement will be successfully negotiated or entered into.

Upon closing of the Acquisition, two directors of Amego, Nicole Marchand and Andy Edelmeier, are expected to resign and be replaced by two nominees of Amego, James Ross and Ian Mallory. Further, Amego will appoint one nominee of Klarzen to its board of directors, Jhon Cohen, all in a manner that complies with the requirements of the Exchange and applicable securities and corporate laws. Current Amego directors Fraser Atkinson and Kirk Exner will remain on the board of directors of the Resulting Issuer.

The following are the names and background of all persons who will be principals or insiders of the Resulting Issuer:

Kirk Exner is the President of Newcoast Capital Corp., a private investment and consulting firm since 1998. During this time, he has held senior management roles with Canadian-listed public companies and provided management consulting services to private and publicly-traded companies in Canada. Prior to this, he was a corporate finance analyst at Golden Capital Securities in Vancouver from 1997 to 1998. Mr. Exner holds an MBA from York University's Schulich School of Business and a B.Sc. in Cellular Biology from the University of British Columbia.

Fraser Atkinson has served as the Executive Chairman and Director of GreenPower Motor Company Inc. since February 2011 and was appointed CEO of the Company in June 2019. Mr. Atkinson has been a director and officer of a number of public companies and is presently a director of Equus Total Return listed on the NYSE. Mr. Atkinson has been actively involved in the Canadian public equity markets since 2002 and was a former partner of KPMG LLP from 1988 to 2002. He is a Chartered Professional Account of British Columbia and graduated from the University of British Columbia in 1980.

Jhon Cohen is the CEO of Klarzen Green Technology LLC. Mr. Cohen has been active in the renewable energy industry with 12 years of international experience in the Americas and Asia focusing on solar energy and sustainable technologies. As CEO of Klarzen, Mr. Cohen developed the company from a start-up into a profitable business with COP$32.4 billion (approximately CAD$11 million) in unaudited revenue in 2022. Under Mr. Cohen's leadership, Klarzen financed and built the largest self-consumption solar plant in the private oil & gas industry in Colombia. Jhon received his Corporate Strategist certificate from Harvard University, an MBA from Hult International Business School, and a Bachelor of Science in Economics from Externado University in Bogota, Colombia.

James Ross is an experienced financial manager and independent power developer. Mr. Ross is currently a Partner in Sage Stone Ventures a renewable energy project development and advisory firm. Past executive positions include President, Northstone Power, Vice President of Westlock-Algonquin Power, and Chief Financial Officer of Daxxes Corporation. Mr. Ross has been in the renewable and power industry for over twenty-five years developing, constructing, financing, acquiring and divesting numerous renewable energy projects. More recently, as a Partner in Sage Stone, he has developed and divested approximately 1,000 MWp of solar, energy storage and small hydro projects. Mr. Ross also has extensive experience in mergers and acquisitions, project finance, financial management, technology commercialization and investment. Past experience includes business in Europe, Latin America, China, and India. Mr. Ross holds a Bachelor of Environmental Science and an MBA from Schulich School of Business at York University.

Ian Mallory has thirty years of experience developing, financing, and executing international energy projects, with a focus on the Americas including Brazil, Mexico and Colombia. A financial lawyer by training, Mr. Mallory has been an executive at Canadian and US gas and power companies TransAlta, Westcoast Energy, Duke, ENMAX, Sea NG and New Fortress Energy. Mr. Mallory is currently Chairman of Zorzal Holdings Canada Inc. and a Director of Priority Transactions Accelerator Group Inc. Prior to joining the energy sector, Mr. Mallory was Counsel to the Treasury of the World Bank in Washington, D.C. He began his career as an associate with the law firm Fasken in Toronto. Mr. Mallory has an A.B. magna cum laude from Harvard University, an LL.B. from the University of Toronto, and an M.Phil from Cambridge University. He was called to the bar of the Province of Ontario in 1986 and received the ICD.D designation from the Institute of Corporate Directors (Canada) in 2018.

Subject to Exchange approval, Amego will loan Klarzen (the "Loan") USD$85,000 upon entering into a Definitive Agreement. The Loan will be secured against a Power Purchase Agreement dated August, 2023 entered into between Klarzen and a real estate development company with operations in Bogota, Colombia.

The Definitive Agreement is expected to contemplate a break fee if Klarzen elects not to pursue with the merger of CAD$200,000 and a 4% member interest in Klarzen, payable in the event Klarzen does not proceed with the reverse takeover to compensate for costs and expenses incurred by Amego.

Upon closing of the Acquisition, Amego will issue to Kirk Exner (the "Finder") a finder's fee (the "Finder's Fee") of 550,000 common shares in the capital of Amego, in accordance with and subject to Exchange policy.

Prior to the completion of the Transaction, if required, Amego may diligently seek shareholder approval, including by way of calling and holding a meeting of its shareholders in accordance with applicable corporate and securities laws, to effect to such matters as Klarzen may reasonably request in connection with the completion of the Transaction, including without limitation the approval of a new equity incentive plan (the "New Plan") as proposed by Klarzen, acting reasonably.

Name Change

In connection with the Transaction, the Parties have agreed that Amego will propose to change its name as mutually determined by Klarzen and Amego (the "Name Change").

Conditions of the Transaction

Completion of the Transaction is subject to the satisfaction of a number of customary conditions, including, among other things: (i) the negotiation and execution of the Definitive Agreement; (ii) completion of satisfactory due diligence by Klarzen and Amego of the other Party; (iii) receipt of all required approvals and consents relating to the Transaction, including without limitation, (A) the TSXV's approval for the listing of the Resulting Issuer's shares, (B) any third party consents, and (C) any approvals of the boards of directors of Amego and directors and sole proprietor of Klarzen, as applicable and as required by the TSXV and under applicable corporate or securities laws; (iv) the director nominees shall have been elected to the board of directors of the Resulting Issuer, conditional upon the completion of the Transaction, and the management nominees shall have been duly appointed as the management of the Resulting Issuer as of the time of closing of the Transaction; (v) no material adverse change shall have occurred in the business, results of operations, assets, liabilities or financial condition of Klarzen or Amego, as applicable, (vi) there being no prohibition under applicable laws against consummation of the Transaction; (vii) Andy Edelmeier and Nicole Marchand, directors of Amego, shall have delivered resignations, acting reasonably, and no termination, severance or other fees shall be payable to any such directors in connection with such resignations; (viii) Amego having adopted the New Plan, as determined by Klarzen, acting reasonably; (ix) Klarzen having an estimated tangible net asset value of USD$3,844,538 based on unaudited financial statements; and (x) such other conditions to closing as may be customary for a transaction of the nature of the Transaction as may be identified by either Party during the course of its due diligence.

Exclusivity

Pursuant to the terms of the LOI, each Party has agreed that, from the date of the LOI until the earlier of the date of the Definitive Agreement or on the date the LOI is otherwise terminated in accordance with its terms, such Party shall not, nor shall any of its representatives (the "Party Group"), initiate, solicit, entertain, negotiate, accept or discuss, directly or indirectly, any proposal or offer from any person or group of persons (including any proposal or offer from a person (or group of persons) who is part of the other Party) to acquire all or any portion of the respective businesses or assets of the other Party (an "Acquisition Proposal") whether by business combination, amalgamation, arrangement, purchase of shares, purchase of assets, tender offer, take-over bid or otherwise, or provide any non-public information to any third party in connection with an Acquisition Proposal or enter into any agreement, arrangement or understanding requiring it to abandon, terminate or fail to consummate the Transaction.

The Resulting Issuer

On the Closing Date, Amego shall complete the Name Change as may be determined by Klarzen and Amego, which will be the name of the Resulting Issuer.

If the Transaction is completed the board of directors and officers of Amego shall be appointed in a manner that complies with the requirements of the TSXV and applicable securities and corporate laws.

Sponsorship

Amego intends to make an application for exemption from the sponsorship requirements of the TSXV in connection with the Transaction; however, there is no assurance that the TSXV will exempt Amego from all or part of the applicable sponsorship requirements.

Non-Arm's Length Parties

No party to the Transaction or their respective Associates or Affiliates (as such terms are defined in the Manual), is a Control Person (as defined in the Manual) of either Amego or Klarzen and as such the Transaction will not be a Non-Arm's Length Party Transaction (as defined in the Manual).

No Non-Arm's Length Party (as defined in the Manual) to Amego (a) has any direct or indirect beneficial interest in Klarzen; (b) is an insider of Klarzen; or (c) has any relationship with the Non-Arm's Length Parties to the Qualifying Transaction (as defined in the manual).

Further Information

Amego and Klarzen will provide further details in respect of the Transaction.

All information contained in this press release with respect to Amego and Klarzen was supplied by the Parties respectively, for inclusion herein, without independent review by the other Party, and each Party and its directors and officers have relied on the other Party for any information concerning the other Party.

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 Amego should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the Transaction and has neither approved nor disapproved the contents of this news release.

This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to or for the account or benefit of U.S. persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

About Amego (TSXV: MEGO.P)

Amego is a corporation incorporated under the laws of the Province of British Columbia and is a "reporting issuer" in the Provinces of British Columbia and Alberta (the "Reporting Provinces"). Amego was incorporated on July 7, 2021 pursuant to the provisions of the Business Corporations Act (British Columbia).

Amego is a "capital pool company" (within the meanings of the policies of the TSXV, including Policy 2.4). Amego has not commenced commercial operations and has no assets other than cash of approximately $895,000 as of November 30, 2023. Except as specifically contemplated in Policy 2.4, until the completion of a Qualifying Transaction (as defined in Policy 2.4), Amego will not carry on any business other than the identification and evaluation of companies, business or assets with a view to completing a proposed Qualifying Transaction.

Contact Information

Amego Capital Corp.
Suite 2050 - 1055 West Georgia Street
Vancouver, B.C. V6C 3P3
Attention: Kirk Exner, Chief Executive Officer
Telephone: (559) 318-5592 or Email: kirkexner@yahoo.com

Cautionary Statement Regarding Forward-Looking Information

This news release contains "forward-looking information" within the meaning of Canadian securities legislation. Forward-looking information generally refers to information about an issuer's business, capital, or operations that is prospective in nature, and includes future-oriented financial information about the issuer's prospective financial performance or financial position. Any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "would", "will", "estimates", "believes", "intends" "expects" and similar expressions which are intended to identify forward-looking statements. More particularly and without limitation, this press release contains forward looking statements concerning (a) the Transaction, (b) the Name Change (including its timing), (c) the expected composition of the board and management of directors of the Resulting Issuer, (d) the New Plan, if any, (e) the completion and timing of board, securityholder and regulatory approvals, including the application to and approval by the TSXV in respect of the Transaction, (f) the proposed structure of the Transaction, (g) the ability of Amego and Klarzen to meet the conditions of the Transaction and the timing for completing the Transaction, (h) the timing for entering into a Definitive Agreement and the terms and conditions therein, (i) the preparation and delivery to securityholders of a management information circular, if required, the timing associated with its preparation and delivery to securityholders and the convening of the necessary securityholders meeting, (j) trading in Amego's common shares and when such trading will resume, if at all, (k) the issuance of and timing associated with issuing a further comprehensive news release or news releases and (l) certain financial information and forecasts.

The Company cautions that all forward-looking statements are inherently uncertain, and that actual performance may be affected by a number of material factors, assumptions and expectations, many of which are beyond the control of Amego and Klarzen, including expectations and assumptions concerning Amego, Klarzen, and the Resulting Issuer, the Name Change, the Transaction, the negotiation of the Definitive Agreement on satisfactory terms, the timely receipt of all required shareholder, court and regulatory approvals (as applicable), including the acceptance of the TSXV, the satisfaction of other closing conditions in accordance with the terms of the Definitive Agreement, as well as other risks, uncertainties, and assumptions, including but not limited to assumptions regarding prevailing market conditions and general business, economic, competitive, political and social uncertainties to develop the forward-looking information in this news release. 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. There can be no assurance that the Transaction will be completed in its entirety. Investors are cautioned that any information released or received with respect to the Name Change and the Transaction may not be accurate or complete and should not be relied upon. Such forward-looking statements, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

The forward-looking statements contained in this press release are made as of the date of this press release, and Amego 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 expressly required by applicable securities laws.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.

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 of this release.

SOURCE: Amego Capital Corp.