Iocaste Ventures Inc. Enters into Letter of Intent for Qualifying Transaction with Layer X Inc.
March 25, 2025 5:00 PM EDT | Source: Iocaste Ventures Inc.
Calgary, Alberta--(Newsfile Corp. - March 25, 2025) - Iocaste Ventures Inc. (TSXV: ICY.P) ("Iocaste") and Layer X Inc. ("Layer X"), today announced that they have entered into a non-binding letter of intent, dated March 19, 2025 (the "LOI"), which outlines the general terms and conditions of a proposed business combination.
About Layer X
Layer X is a technology company focused on advancing emerging blockchain protocols through innovative staking and infrastructure solutions. Its mission is to empower high-throughput blockchain networks by delivering secure, efficient, and user-friendly staking infrastructure - eliminating the complexities associated with existing services. Layer X is led by an experienced management team with a track record of success in the crypto industry.
About Iocaste
Iocaste is a "capital pool company" that completed its initial public offering in November 2021. The common shares of Iocaste ("Iocaste Shares") are listed for trading on the TSX Venture Exchange ("TSXV") under the stock symbol ICY.P. Iocaste has not commenced commercial operations and has no assets other than cash. It is intended that the Transaction (as defined below), when completed, will constitute the "Qualifying Transaction" of Iocaste pursuant to Policy 2.4 - Capital Pool Companies (the "CPC Policy") of the TSXV.
Terms of the Transaction
The proposed business combination would occur by way of a share exchange, merger, amalgamation, arrangement or other similar form of transaction, which will result in Layer X, and in turn its various subsidiaries, at the applicable time (or successor corporation, as the case may be) becoming a wholly owned subsidiary of Iocaste or otherwise combining its corporate existence with that of Iocaste (the "Transaction"). Iocaste, after completion of the Transaction, is referred to herein as the "Resulting Issuer".
Pursuant to the terms and conditions of the LOI, Iocaste and Layer X will negotiate and enter into a definitive agreement (the "Definitive Agreement") incorporating the principal terms of the Transaction as described in the LOI and this press release. There is no assurance that a Definitive Agreement will be successfully negotiated or entered into.
Pursuant to the Transaction, Iocaste will issue Iocaste Shares as consideration to purchase, acquire or exchange all of the issued and outstanding Layer X shares. The exchange ratio for the Transaction (the "Exchange Ratio") shall be determined by reference to a deemed pre-money valuation of $15,000,000 for Layer X, subject to any adjustments by the parties. Each Layer X option shall be exchanged for an Iocaste option, subject to any adjustments based on the Exchange Ratio.
The LOI was negotiated at arm's length. The terms and conditions outlined in the LOI are non-binding on the parties and the LOI is expected to be superseded by the Definitive Agreement to be negotiated between the parties.
Private Placement
The parties currently contemplate that Layer X will complete a private placement of subscription receipts of Layer X (each, a "Subscription Receipt") for a minimum of $5,000,000 or such other amount as Layer X may determine, subject to the approval of Iocaste, such approval not to be unreasonably withheld, at a price per Subscription Receipt to be determined in accordance with the TSXV requirements and in the context of the market, having regard to an assessment of general market conditions and investor sentiment (the "Private Placement"). The Private Placement may be conducted on a brokered or non-brokered basis, and Layer X may engage an investment dealer or agent in connection with the Private Placement. Iocaste will its best efforts to assist Layer X in securing commitments for the Private Placement and will use commercially reasonable efforts to raise at least $2,000,000. Further disclosure will be provided upon the successful negotiation. There is no assurance that such negotiations will be concluded successfully.
Management of the Resulting Issuer
As a result of the Transaction, the Resulting Issuer will indirectly carry on the business of Layer X and will change the Resulting Issuer's name to such name as determined by Layer X and as may be accepted by the TSXV and any other relevant regulatory authorities.
If the Transaction is completed, it is expected that the board of directors of the Resulting Issuer on closing will consist of a minimum of 3 directors, each nominated by Layer X. At the closing of the Transaction, the current directors of Iocaste will resign and be replaced by the nominees of Layer X, in accordance with corporate law and with the approval of the TSXV.
In addition, voting support agreements shall be signed in form and substance acceptable to Layer X, confirming that each of the holders of Resulting Issuer common shares which are subject to escrow under the Transaction shall vote such Resulting Issuer common shares in support of all matters recommended by management for approval by the shareholders of the Resulting Issuer until the earlier of (i) the date the applicable Resulting Issuer common shares are released from escrow; and (ii) two years following the closing of the Transaction.
Conditions Precedent
Completion of the Transaction is subject to a number of conditions including, but not limited to:
satisfactory completion of due diligence by both parties;
execution of the Definitive Agreement;
completion of the Private Placement;
receipt of all director, shareholder (if necessary) and requisite regulatory approvals, including the acceptance of the TSXV; and
preparation and filing of a management information circular or filing statement outlining the definitive terms of the Transaction and describing the business to be conducted by the Resulting Issuer following completion of the Transaction, in accordance with the policies of the TSXV.
Special Meeting of Iocaste Shareholders
The Transaction would be carried out by parties dealing at arm's length to one another and therefore would not be considered a "Non-Arm's Length Qualifying Transaction" as such term is defined in the CPC Policy. As a result, a special meeting of the shareholders of Iocaste is not required by the TSXV to approve the Transaction. However, the structure of the Transaction has not yet been finalized so shareholder approval under corporate law may be required in certain circumstances.
Sponsorship
Iocaste 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 Iocaste from all or part of the applicable sponsorship requirements.
Trading Halt
Trading in the Iocaste Shares has been halted and is not expected to resume trading until completion of the Transaction or until the TSXV receives the requisite documentation to resume trading.
Additional Information
Iocaste will provide further details in respect of the Transaction in due course by way of press release in accordance with the requirements of the CPC Policy. However, Iocaste will make available to the TSXV all information, including financial information, as required by the TSXV and will provide, in a press release to be disseminated at a later date, required disclosure.
All information contained in this press release with respect to Iocaste and Layer X 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, acceptance of the TSXV and if applicable pursuant to the requirements of the TSXV, majority of the minority 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 press 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.
For further information contact:
Neither 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.
Notice on Forward Looking Information
This press release contains forward-looking statements and forward-looking information (collectively, "forward-looking statements") within the meaning of applicable securities laws. 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 the Transaction, the Private Placement, the expected composition of the board of directors of the Resulting Issuer, the completion and timing of the application to the TSXV in respect of the Transaction, the proposed structure by which the Transaction is to be completed, the ability of Iocaste and Layer X to meet the conditions of the Transaction in the required timeframes, obtaining the necessary exemptions and approvals from the TSXV or other regulatory bodies, including the business, name and function of the Resulting Issuer and certain financial information and forecasts. Iocaste 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 Iocaste and Layer X, including expectations and assumptions concerning Iocaste, Layer X, the Resulting Issuer, 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 and uncertainties, including those described in Iocaste's final prospectus dated October 14, 2021 filed with the British Columbia Securities Commission, the Alberta Securities Commission and the Ontario Securities Commission and available on SEDAR at www.sedar.com. The reader is cautioned that assumptions used in the preparation of any forward-looking statements may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of Iocaste. The reader is cautioned not to place undue reliance on any forward-looking statements. Such information, 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 Iocaste 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 securities law.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.
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.
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