11:27:08 EST Sun 05 Feb 2023
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Sonora closes three financing tranches for $7.2-million

2022-12-06 17:30 ET - News Release

Mr. Ken Churchill reports

BTQ AND SONORA PROVIDE TRANSACTION UPDATE

Sonora Gold & Silver Corp. has provided an update to its previously announced transaction with BTQ AG.

Update on Sonora financing

The company is pleased to announce that it has closed three tranches of its subscription receipt financing previously announced Dec. 31, 2021, and has issued 18,001,250 subscription receipts for aggregate gross proceeds of $7,200,500. The gross proceeds are being held in escrow by an escrow agent in accordance with the terms of an escrow agreement between the company and the escrow agent, and will be released to the company upon satisfaction of the escrow release conditions (as described below). Upon satisfaction of the escrow release conditions and subject to certain adjustments, each subscription receipt will, for no additional consideration, automatically be converted, without further action on the part of the subscription receipt holders, into one common share of the company, as constituted following the completion by the company of the consolidation of its common shares on a one-for-10 basis. In connection with the closing of the Sonora financing, the company will pay an aggregate of $93,175 in cash and issue 232,936 warrants to certain finders.

Transaction update

The company and BTQ are continuing to work together to complete the requisite filings and submissions required to obtain acceptance from a recognized exchange of the transaction, and have completed an initial filing with the NEO Exchange. The company and BTQ anticipate providing all materials required by the NEO in connection with the transfer of the listing of the common shares of the company to the NEO in the first quarter 2023.

The company, BTQ and certain shareholders of BTQ have also entered into amending agreements to the share exchange agreement entered into among the company, BTQ and certain shareholders of BTQ, extending the outside date for the completion of the transaction to Feb. 28, 2023.

Corporate update -- BTQ

BTQ is happy to announce that the company has received government approval for the establishment of a branch office in Taiwan. While BTQ initially set up a representative office in 2021, its Taipei operations have grown considerably since then, and the transition to a branch office structure is the logical next step for the company. BTQ now has an office in the heart of Taipei's Zhongzheng district, and registering as a branch office of the parent company has expanded the scope of available business activities. By setting up a branch office in Taipei, BTQ has deepened its commitment to building next-generation encryption technology within Taiwan's world-class semiconductor ecosystem, with an ever growing intellectual property portfolio generated by Taiwan's market leaders in the field of postquantum cryptography. With additional offices in Liechtenstein and collaborations with high-level research institutions including Taiwan's ITRI, BTQ is poised to take the lead in bringing quantum secure technology to the global market.

In addition to securing its branch office, BTQ has been co-organizing the PQC standardization and migration workshop collocated with the Asiacrypt 2022 conference in Taipei. This workshop will feature world-class speakers from the National Institute of Standards and Technology of the United States, Samsung, NXP Semiconductors, and other top research institutes regarding the developments and integration of postquantum cryptography in digital infrastructure. Dr. Po-Chun Kuo, BTQ's chief technology officer, will be presenting the theory behind PQScale, BTQ's postquantum scaling solution for blockchains and similar applications, based on its proprietary aggregate signature technology. In addition, Dr. Chen-Mou Cheng will be showcasing Keelung, BTQ's compiler and domain-specific language embedded in Haskell, capable of significantly accelerating the development of zero-knowledge cryptography applications across a wide variety of scenarios. Dr. Cheng will also be speaking at the Hon Hai Technology Group (Foxconn) NExT Forum on Quantum Computing, dedicated to quantum communication technology and its applications. It will cover topics including quantum communication theory, quantum hardware implementation, quantum key distribution and postquantum cryptography.

Trading of the company shares

Trading in the common shares of the company has been halted in connection with the announcement of the proposed transaction. The company expects that trading will remain halted pending closing of the transaction, subject to the earlier resumption upon acceptance of the transaction by a recognized exchange, the filing of required materials and, among other things, the completion of the Sonora financing, which will follow the completion or waiver of certain escrow release conditions thereof, which include the satisfaction and/or waiver of the conditions to the transaction. If the escrow release conditions are satisfied or waived prior to the outside date for the transaction, as such date may be amended by the company and BTQ, the proceeds from the Sonora financing, including those proceeds raised in additional tranches, if any, will be released to the company.

We seek Safe Harbor.

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