PesoRama Inc. and Skyscape Capital Inc. File Final Prospectus and Announce $10 Million Financing and Receipt of TSXV Conditional Approval for Qualifying Transaction

Toronto, Ontario--(Newsfile Corp. - February 1, 2022) - PesoRama Inc. ("PesoRama") and Skyscape Capital Inc. (TSXV: SKY.P) ("Skyscape") are pleased to announce today that Skyscape has filed a final prospectus (the "Prospectus") with the securities regulatory authorities in Alberta, British Columbia and Ontario in respect of the Qualifying Transaction between Skyscape and PesoRama (the "Transaction") and prospectus offering (the "Offering") in connection with the Transaction. The Transaction is being completed in accordance with TSX Venture Exchange ("TSXV") Policy 2.4 Capital Pool Companies (the "CPC Policy"). Skyscape and PesoRama also report that Skyscape has received conditional acceptance from the TSXV for the Transaction, as summarized below and described in detail in the Prospectus.

The Offering

Pursuant to the Offering and a previously completed private placement of Subscription Receipts (the "Subscription Receipts") by PesoRama completed in November, 2021 (the "Subscription Receipt Placement"), the companies will receive gross proceeds of up to approximately $10 million. The Offering is for up to 4,700,000 units (the "Resulting Issuer Units") of Skyscape at an offering price of $1.00 per Resulting Issuer Unit, for gross proceeds of up to $4,700,000, and the Subscription Receipts Placement was for 5,335,170 Subscription Receipts at an issue price of $1.00 per Subscription Receipt, for gross proceeds of $5,335,170 or up to $10,035,170 in aggregate with the Offering. Each Subscription Receipt is exchangeable for one Resulting Issuer Unit upon completion of the Transaction and the proceeds from the Subscription Receipt Placement are being held in escrow and will be released upon the completion of the Transaction and Offering. Skyscape has also granted to the Agents (as defined below) an over-allotment option to purchase up to an additional 705,000 Resulting Issuer Units on the same terms and conditions, exercisable in whole or in party by the Agents up to 30 days following closing of the Offering.

Each Resulting Issuer Unit is comprised of one Skyscape common share (a "Resulting Issuer Common Share") and one share purchase warrant (a "Resulting Issuer Warrant"). Each Resulting Issuer Warrant will entitle the holder to purchase one Resulting Issuer Common Share for a purchase price of $1.25 for a period of two years. At the Resulting Issuer's (as defined below) option, if the volume-weighted average price of the Resulting Issuer Common ‎Shares is ‎equal to or greater than $2.00 over a 10 consecutive trading day period, ‎the Resulting Issuer may, at its option, within 10 business days following such 10-day ‎period, accelerate the exercise period of the Resulting Issuer Warrants to a period ending 30 days from the date issuance of a press release by the Resulting Issuer announcing such acceleration.

The Offering is being distributed pursuant to the terms of Agency Agreement (the "Agency Agreement") among Skyscape, PesoRama and a syndicate of agents led by Canaccord Genuity Corp. and including Cormark Securities Inc. and Richardson Wealth Limited (collectively, the "Agents").

Pursuant to the terms of the Agency Agreement, Skyscape will pay to the Agents: (i) a cash commission equal to 7.0% of the aggregate gross proceeds of the Offering; and (ii) such number of warrants (the "Agents' Warrants") as is equal to 7.0% of the number of Resulting Issuer Units sold pursuant to the Offering. Each Agents' Warrant shall be exercisable for one Resulting Issuer Common Share at a price of $1.00 until the date that is 24 months from the closing date of the Offering.

The Offering is only being made to the public by prospectus. The Prospectus contains important detailed information about the securities being offered. Copies of the Prospectus may be obtained from any of the Agents listed above. Investors should read the Prospectus before making an investment decision.

The Transaction

Skyscape and PesoRama are pleased to announce that they, together with 11518003 Canada Inc. ("Subco"), a wholly-owned subsidiary of Skyscape, intend to complete the Transaction concurrently with the completion of the Offering. Pursuant to the terms of the Transaction, Subco will amalgamate with PesoRama (the "Amalgamation") to complete an arm's length qualifying transaction. The Amalgamation is structured as a three-cornered amalgamation and, as a result, the amalgamated corporation will become a wholly-owned subsidiary of Skyscape at the time of the completion of the Amalgamation. In connection with the Transaction, Skyscape will change its name to "PesoRama Inc." (the "Resulting Issuer") and will continue to carry on the business of PesoRama.

About PesoRama

PesoRama is a Canadian company with its corporate office located in Toronto and operations based in Mexico. In Mexico, PesoRama operates a chain of corporately owned value retail stores under its "JOI Canadian Stores" banner, which offer a variety of quality products for sale to customers typically at a single price point. PesoRama launched its operations in 2019 in Mexico City and the surrounding areas, targeting high density, high traffic locations. PesoRama's JOI Canadian Stores offer consistent merchandise offerings such as household wares, kitchenware, home cleaning products, home décor products, seasonal products, stationary, toys and games, arts and crafts materials, electronics, souvenirs, novelties, jewelry, clothing, footwear, headwear, costumes, personal care products, health and beauty, cosmetics, food, beverages, snacks, confectionary, pet food and pet accessories, hardware, garden tools and other general merchandise. To date, PesoRama has opened and operates 18 stores in Mexico and currently seeks to implement an aggressive expansion strategy by opening new stores if and when, its board of directors deems to be in its best interest and subject to available funds.

Select Financial Information for PesoRama

The Prospectus sets out selected annual financial information of PesoRama for the nine month period ended October 31, 2021, and each of its financial years ended on January 31, 2021, 2020 and 2019, which should be read in conjunction with the financial statements and related management discussion and analysis of PesoRama for the three months ended October 31, 2021 and the years ended January 31, 2021 and 2020, attached as Schedule "B" to the Prospectus.

About the Transaction

Under the terms of the Amalgamation Agreement, at the effective time of the Amalgamation (the "Effective Time"), among other things, each holder of common shares of PesoRama ("PesoRama Common Shares") will exchange their PesoRama Common Shares for one Resulting Issuer Common Share at a deemed price of $1.00 per Resulting Issuer Common Share. As of the date hereof, there are currently 49,643,211 PesoRama Common Shares outstanding. Immediately prior to the Effective Time, principal and accrued interest of convertible debentures in the capital of PesoRama in the aggregate amount of $7,223,077 will convert into 8,497,738 units of PesoRama ("PesoRama Units") at a deemed price of $0.85 PesoRama Unit, with each PesoRama Unit consisting of one PesoRama Common Share and one warrant (with each warrant exercisable to purchase a PesoRama Common Share for two years at a price of $1.25 per PesoRama Common Share). As a result of such conversions and the conversion of the Subscription Receipts described above, PesoRama is anticipated to have 65,226,119 PesoRama Common Shares outstanding immediately prior to the completion of the Transaction.

In addition: (i) each option to purchase common shares in the capital of PesoRama (a "PesoRama Option") outstanding at the Effective Time will be exchanged for an equal number of options to purchase Resulting Issuer Common Shares; and (ii) each warrant of PesoRama outstanding at the Effective Time will be exchanged for an equal number of warrants of the Resulting Issuer.

Also, in connection with Transaction, the Resulting Issuer will issue to Fundamental HS, S.C. 1,750,000 Resulting Issuer Common Shares as a structuring fee.

Immediately following the completion of the Transaction on a non-diluted basis, the current shareholders of Skyscape will own 2,000,000 Resulting Issuer Common Shares (anticipated to be approximately 2.8%) and the holders of PesoRama Common Shares existing immediately prior to the Transaction (including any PesoRama Common Shares issued upon the conversion of the Subscription Receipts and convertible debentures) are anticipated to own approximately 67,743,388 Resulting Issuer Common Shares (anticipated to be approximately 94.8%).

Arm's Length Transaction

The Transaction was negotiated by parties who are dealing at arm's length with each other and therefore, in accordance with the policies of the TSXV, is not a Non-Arm's Length Qualifying Transaction, as that term is defined by the TSXV.

Proposed Management and Board of Directors of the Resulting Issuer

Upon completion of the Transaction, it is anticipated that the persons identified below will serve as directors and officers of the Resulting Issuer.

Rahim Bhaloo, Director and Executive Chairman

Mr. Bhaloo has had a career spanning more than 20 years, focused on real estate and development. He developed a portfolio of retirement and nursing homes with one of the largest pension funds in North America, the majority of which were sold to a third party in 2011. Mr. Bhaloo started his career with a chain of retail coffee houses which he sold to a private operator after 5 years. Mr. Bhaloo has been actively involved in various real estate projects including green field development, zoning and construction, in Canada and Mexico.

Erica Fattore, Chief Executive Officer and President

Ms. Fattore was part of the PesoRama founding Management Team in 2018. She began her career in 1998 with the Silver Dollar Stores, one of the pioneering companies in the single price point dollar store industry. She has held senior merchandising and management positions at Dollar Giant, Dollar Tree, Keefco Ltd and Gertex USA. Ms. Fattore has more than two decades of experience in dollar and mass retail in private label development, direct sourcing, importing and retail operations.

Lynn Chapman, Chief Financial Officer

Mr. Chapman is a Chartered Professional Accountant of Canada (Alberta) with over 13 years of experience in international business in various industries with disciplines in finance, accounting, and financial reporting under IFRS. He has over 10 years of experience as a Controller and/or Chief Financial Officer with Canadian public companies with international operations, predominantly in Latin America. Mr. Chapman is the managing director of Lancaster Capital Advisory Corp., where he and his team provide business management, accounting, financial reporting and advisory support to a number of publicly-listed issuers on the TSX, TSX Venture Exchange, Canadian Stock Exchange, and the NEO Exchange as well as to non-listed companies. Currently, Mr. Chapman also acts as the Chief Financial Officer of ROK Resources Inc. and ThreeD Capital Inc.

Abdulmajeed Bawazeer, Chief Strategy Officer

Mr. Bawazeer was part of the PesoRama founding management team in 2018. After several years in investment banking, he has parlayed his organizational and management education to playing an active role in the efficient implementation of the company's supply chain strategy, its management and future strategic growth plans and development. Mr. Bawazeer is responsible for the day-to-day management of logistics, warehousing, distribution, and foreign trade compliance.

Paul Pathak, Director

Mr. Pathak is and has served as a partner of Chitiz Pathak LLP since 1996, a Toronto law firm serving clients in the securities and investment industries, including issuers and dealers on a full range of securities transactions. Mr. Pathak practices principally in the areas of corporate, securities, mergers, acquisitions and commercial law. Mr. Pathak has acted for issuers in a broad range of securities transactions, including initial public offerings, reverse take-overs, establishment of Capital Pool Companies, going-private transactions and numerous financing structures. Mr. Pathak has served as a member of the board of directors of several private and public corporations listed on both Canadian and American stock exchanges. Mr. Pathak currently also serves as a director of Bragg Gaming Group Inc., Eddy Smart Home Solutions Ltd. (TSXV) and Canaccord Genuity G Ventures Corp. (NEO). Mr. Pathak was called to the Ontario Bar in 1994, having completed his LL.B. at Osgoode Hall Law School in 1992.

Antonio Heredia, Director

Antonio Heredia is a founder and partner of Fundamental Private Markets and leads the efforts in Mexico. He has almost two decades of experience in investing and financial advisory. Prior to founding Fundamental he worked at Capital Group Private Markets, the private equity arm of the Capital Group, based out of London and covering Emerging Markets. He previously worked at Goldman, Sachs & Co. in its investment banking group based in Mexico City and prior to that he worked for J.P. Morgan Securities in its Asset Management Division based in Houston. He participates in diverse capacities at the board of directors of different companies in the consumer space in Latin America. Mr. Heredia received his Masters in Business Administration from the University of Oxford's Saïd Business School and his B.S. in Industrial and Systems Engineering with compulsory honours classes from ITESM (Tec de Monterrey).

Andrew Parks, Director

Mr. Parks is the CEO and a director of Fountain Asset Corp. He was most recently a portfolio manager at a Toronto-based asset management firm and has years of experience as a research analyst and trader. Mr. Parks is a CFA and holds an Honours Bachelor of Business Administration from Wilfrid Laurier University.

Sponsorship

The Transaction was exempt from the TSXV sponsorship requirements.

Closing

The closing of the Transaction and Offering is expected to occur on or about February 8, 2022.

Further Information

Additional information about Skyscape, PesoRama the Offering and the Transaction is set out in the Prospectus, a copy of which is available for viewing and download on SEDAR at www.sedar.com under Skyscape's profile.

Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance. 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 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 TSXV has in no way passed upon the merits of the Transaction and has neither approved nor disapproved the contents of this press release.

In this press release, all references to "$" are to Canadian dollars.

* * *

This news release does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in Canada, the United States or any other jurisdiction.

This news release does not provide full disclosure of all material facts relating to the securities offered pursuant to the Offering. Investors should read the Prospectus and any amendment for disclosure of those facts, especially risk factors relating to the securities offered, before making an investment decision.

THE SECURITIES REFERRED TO HEREIN 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 IN THE UNITED STATES (AS DEFINED IN REGULATION S UNDER THE U.S. SECURITIES ACT) UNLESS REGISTERED UNDER THE U.S. SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.

Notice regarding forward-looking statements:

This news release includes forward-looking statements regarding Skyscape, Subco, PesoRama, the Resulting Issuer and their respective businesses, which may include, but is not limited to, statements with respect to the proposed directors and officers of the Resulting Issuer, the completion of the Transaction and the Offering, the terms on which the Transaction and the Offering are intended to be completed, the release of the proceeds from the Subscription Receipt Placement, the use of the net proceeds from the Offering, the anticipated share capital of the Resulting Issuer, the ability to obtain regulatory and shareholder approvals and other factors. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "is expected", "expects", "scheduled", "intends", "contemplates", "anticipates", "believes", "proposes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Such statements are based on the current expectations of the management of each entity. The forward-looking events and circumstances discussed in this release, including completion of the Transaction and the Offering may not occur by certain specified dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting the companies, including risks regarding the technology industry, failure to obtain regulatory or shareholder approvals, economic factors, the equity markets generally and risks associated with growth and competition. Although Skyscape and PesoRama have attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. No forward-looking statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and Skyscape and PesoRama undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, other than as required by law.

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

Not for distribution to United States newswire services or for dissemination in the United States

For further information concerning Skyscape Capital Inc., please contact:

Paul Pathak, Director
ppathak@chitizpathak.com

For further information concerning PesoRama Inc., please contact:

Rahim Bhaloo, Executive Chairman
rahim@rahimbhaloo.com

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/112433