1287390 BC Ltd. and NiCAN Limited Announce the Closing of a $6.1 Million Concurrent Private Placement in Their Proposed Business Combination to Form NiCAN Limited | 2022-04-08 | Press Releases

Toronto, Ontario–(Newsfile Corp. – April 8, 2022) – 1287390 BC Ltd. (“390“) and NiCAN Limited (“NiCAN“) are pleased to announce that following the 390 press release dated March 3, 2022, NiCAN has successfully closed the previously announced non-brokered private placement (the “CompetitorOffer“) of 14,483,446 Subscription Receipts (as defined below), for gross proceeds of $6,108,675.70.

The competing offer was made in connection with the proposed business combination (the “Transaction“) between 390 and NiCAN. NiCAN and 390 entered into a merger agreement dated March 3, 2022 (the “Final agreement“), whereby 390 will merge with NiCAN (the “Merger“) and continue as one company being the “Resulting emitter“. Upon closing of the Transaction, the resulting Issuer (to be named “NiCAN Limited“) will carry on the business of NiCAN and the securityholders of NiCAN and 390 will become securityholders of the Resulting Issuer.

The oversubscribed concurrent offering consisted of the issuance of (i) 8,177,500 non-flow-through subscription receipts of NiCAN (the “HD subscription receipts“) at a price of $0.40 per HD subscription receipt; and (ii) 6,305,946 flow-through subscription receipts (the “FT Subscription Receipts” and with HD subscription receipts, the “Subscription receipts“) at a price of $0.45 per FT Subscription Receipt. The Subscription Receipts were issued pursuant to and are governed by a Subscription Receipt Agreement dated March 30, 2022 (the “Subscription Receipt Agreement“), between 390, NiCAN and TSX Trust Company, as Subscription Receipt and Escrow Agent.

It is intended that each HD Subscription Receipt will, pursuant to the Subscription Receipt Agreement (as defined below), be automatically converted, without further payment of consideration and without further action by the holder thereof, into one Share Ordinary NiCAN (each a “Ordinary share“). It is intended that each FT Subscription Receipt will, pursuant to the Subscription Receipt Agreement, be automatically converted, without further payment of consideration and without further action by the holder thereof, into one common share, issued on a “flow-through base” (each, a “FT Sharing“) upon satisfaction of the escrow release conditions contained in the Subscription Receipt Agreement. The FT Shares will qualify as “Flow-Through Shares” within the meaning of income tax law (Canada) (the “tax law“). Immediately prior to the Merger, the Subscription Receipts are expected to be converted into Common Stock and Shares of FT which will then be exchanged pursuant to the Merger Agreement for Shares of the Resulting Issuer (the “Resulting Issuer Shares“) on the basis of one Resulting Issuer Share for each Common Share and FT Share so held, respectively.

Under the Competing Offer, NiCAN paid certain eligible persons (the “Researchers“) an intermediary’s commission equal to 6.0% of the total gross proceeds of subscribers participating in the simultaneous offer introduced by these intermediaries (the “Intermediation fees“). As additional consideration, NiCAN issued a total of 403,627 intermediation mandates (the “Intermediary mandates“) to the Finders, corresponding to 6.0% of the aggregate number of Subscription Receipts issued under the Concurrent Offering to subscribers presented by each of such Finders. Each Finder Warrant entitles the holder thereof to acquire one common share (each, a “Researcher share“) at an exercise price of $0.40 for a period of 12 months following the closing of the concurrent offering.

The gross proceeds of the Concurrent Offering, less $181,238.35, being 50% of the finder’s fees payable to intermediaries in connection with the Concurrent Offering, have been deposited in escrow pending the satisfaction of certain conditions of release of escrow contained in the Subscription Receipt Agreement, including satisfaction of all conditions precedent to the transaction and completion of the Merger pursuant to the Merger Agreement.

The transaction is conditional on the TSX Venture Exchange (“TSXV“) approving the listing of the Resulting Issuer’s shares and other customary terms.

The net proceeds of the Concurrent Offering from the HD Subscription Receipts will be used by the Resulting Issuer to fund exploration, as well as for general corporate purposes after completion of the transaction. The aggregate gross proceeds generated from the sale of the FT Subscription Receipts (the “Commitment amount“) will be used by the Resulting Issuer prior to December 31, 2023 for general exploration expenditures, which will constitute qualifying Canadian exploration expenditures (as defined in subsection 66(15) of the Tax Act, which will be eligible as “transmitted mining expenses” within the meaning of the Tax Act (the “Eligible expenses“). The Resulting Issuer will waive the Eligible Expenditures so incurred for subscribers of FT Shares, so that the total Commitment Amount will be deductible from the income of each such subscriber for the calendar year ending on 31 December 2022.

For further details regarding the transaction, please see 390’s press release dated March 3, 2022 and subsequent 390 press releases to be issued with respect to the transaction.

This press release does not constitute an offer to sell or a solicitation of an offer to buy 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 Law“) or any state securities law and may not be offered or sold in the United States or to United States persons unless registered under United States securities law and applicable state securities laws securities or an exemption from such registration.

Caution Regarding Forward-Looking Statements

This press release contains certain “forward-looking statements” under applicable Canadian securities laws. Forward-looking statements include, but are not limited to, statements regarding: the terms and conditions of the proposed transaction; satisfaction of the receiver’s release conditions; the use of the proceeds of the concurrent placement; future development plans; and the affairs and operations of the Resulting Issuer after the proposed Transaction. Forward-looking statements are necessarily based on a number of estimates and assumptions which, while believed to be reasonable, are subject to known and unknown risks, uncertainties and other factors which may cause actual results to differ. and future events will differ materially from those expressed or implied by such forward-looking statements. These factors include, but are not limited to: the satisfaction or waiver of all conditions applicable to the completion of the transaction (including the receipt of all necessary shareholder, stock exchange and regulatory approvals or consents , and the absence of material changes to the parties and their respective businesses); the synergies expected from the Transactions not carried out; business integration risks; fluctuations in general macroeconomic conditions; fluctuations in the securities markets; fluctuations in spot and forward prices of base metals or certain other commodities; fluctuations in currency markets (such as the exchange rate between the Canadian dollar and the US dollar); change in national and local government, legislation, taxation, controls, regulations and political or economic developments; risks and hazards associated with exploration, development and mining activity (including environmental hazards, industrial accidents, unusual or unexpected formation pressures, cave-ins and floods); failure to obtain adequate insurance to cover risks and hazards; the presence of laws and regulations that may impose restrictions on mining; employee relations; relations with local communities and indigenous peoples and their claims; the availability of rising costs associated with mining inputs and labor; the speculative nature of mineral exploration and development (including the risks of obtaining necessary licenses, permits and approvals from governmental authorities); and title deed.

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. 390 and NiCAN disclaim any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

Completion of the transactions is subject to a number of conditions, including, but not limited to, acceptance on the TSXV. Where applicable, transactions cannot be completed until the required shareholder approval has been obtained. There can be no assurance that transactions will be completed as offered or at all.

Investors are cautioned that, unless otherwise specified in the listing application to be prepared in connection with the transactions, any information published or received regarding the transaction may not be accurate or complete and should not be relied upon.

The TSX Venture Exchange Inc. has in no way passed on the merits of the proposed transaction and has neither approved nor disapproved of the contents of this press release.

All information in this press release regarding 390 and NiCAN has been provided by the parties respectively, for inclusion herein, without independent review by the other party, and each party and its directors and officers have relied upon the other party for any information regarding the other party.

For more information, please contact:

1287390 BC Ltd.

James Ward, director

Phone: 416-897-2359

Email: [email protected]

NiCAN Limited

Brad Humphrey

President and CEO

Phone: 416-565-4007

Email: [email protected]

Shaun Heinrich

Financial director

Phone: 604-839-2788

[email protected]

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 or accuracy of this press release.

Not for distribution to United States news agencies or dissemination in the United States.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/119888