Avila Energy Corporation (CNSX:VIK) signed a letter of intent to acquire Insight Acquisition Corp. (NYSE:INAQ) from a group of shareholders in a reverse merger transaction on January 24, 2023. Avila Energy Corporation entered into a business combination agreement to acquire Insight Acquisition Corp. from a group of shareholders in a reverse merger transaction for approximately $130 million on April 3, 2023. The Share Consideration for Avila Securityholders is 12,528,000 AB PubCo Common Shares issued on the Closing Date. The Company or a newly-formed company affiliated with Avila Energy Corporation will combine with IAC so that all of the issued and outstanding securities of the Avila Energy Corporation and IAC will be exchanged for shares of the Surviving Company based on a fully diluted enterprise value of the Surviving Company of $185,280,000. The transaction will create a surviving company the shareholders of which will be composed of the then current shareholders of Avila and shareholders and participating parties of IAC. It is anticipated that the current shareholders of Avila will, excluding any additional financing that may be raised in connection with the transaction and before considering any redemption of the IAC shareholders, hold approximately 68% of the issued shares of the surviving company upon closing of the transaction. As of March 15, 2023, Avila will hold approximately 59.6% of the then issued and outstanding shares of the Resulting Company post-closing of the transaction in one scenario (high) and will hold approximately 52.1% stake of the Resulting Company in another scenario (low), representing collectively 12,528,000 shares of the Resulting Company. Upon closing of the transaction, the combined company will continue to operate as ?Avila Energy Inc.? (AB PubCo). and intends to list on the Nasdaq Stock Market. Under the business combination agreement, Insight will continue from the State of Delaware to the Province of Alberta and acquire Avila in an amalgamation pursuant to a court-approved plan of arrangement under Alberta law. The Board of Directors of the Surviving Company is expected to consist of seven persons, five of which shall be appointed by persons designated by Avila, including three independent directors, and Leonard Van Betuw will remain the CEO and Chairman of the Board of the surviving company. If Avila enters into a Superior Proposal, in which case Avila must pay IAC a $5 million termination fee.

The transaction remains subject to the approval of the boards of directors and stockholders of each of IAC and Avila, as well as other customary closing conditions, including negotiation and execution of a definitive business combination agreement for the transaction, regulatory approval, the waiting period for the HSR Filing has expired or been terminated, the AB PubCo Common Shares shall have been approved for listing on The New York Stock Exchange or The NASDAQ Stock Market, execution of indemnification agreements with AB PubCo effective as of the Closing, IAC and AB PubCo shall have delivered to Avila resignations of certain directors and executive officers. The boards of directors of both Avila and Insight have unanimously approved the proposed business combination, which is expected to be completed in the fourth quarter of 2023. As of June 27, 2023, Insight has sent a notice of default to Avila, and that it intends to terminate the transaction if such alleged default is not cured by July 26, 2023. Avila is confident any outstanding issues Insight has raised can be satisfactorily resolved by the cure date of July 26, 2023.

Wayne Egan of WeirFoulds LLP and Richard Raymer of Dorsey & Whitney LLP are serving as legal advisors to Avila. Mitchell Nussbaum of Loeb & Loeb LLP is serving as legal advisor to Insight. Morrow & Co., LLC acted as proxy solicitor and Continental Stock Transfer & Trust Company acted as transfer agent to Insight. Insight has agreed to pay Morrow Sodali a fee of $30,000 plus costs and expenses.