Lake Winn Resources Corp., is pleased to announce that further to its news releases dated September 16, 2020 and September 30, 2020, the Company has closed the non-brokered private placement Equity Offerings for aggregate proceeds of $2,750,000 and a Shares for Debt Transaction as follows:
Closing of Equity Offerings
The Company is pleased to announce the closing of a non-brokered private placement of approximately $1,250,000 in flow-through units (the “FT Units”) of the Company (the “FT Unit Offering”) at a subscription price of $0.10 per FT Unit. Each FT Unit consisted of one common share of the Company (a “FT Unit Share”) and one-half of one common share purchase warrant (each whole warrant a “FT Unit Warrant”), with each FT Unit Warrant entitling the holder thereof to acquire one common share of the Company (a “FT Unit Warrant Share”) at a price of $0.30 for a period of two (2) years following the closing of the FT Unit Offering.
The gross proceeds from the FT Unit Offering will be used by the Company to incur eligible “Canadian exploration expenses” that will qualify as “flow‐through mining expenditures” as such terms are defined in the Income Tax Act (Canada) (the “Qualifying Expenditures“) related to the Company’s projects in Manitoba. All Qualifying Expenditures will be renounced in favour of the subscribers of the FT Unit Shares effective December 31, 2020.
The Company is also pleased to announce the closing of an additional two non-brokered private placements of approximately $1,500,000 in units (the “Units”) of the Company (collectively, the “Unit Offerings”).
The first Unit Offering was closed at a subscription price of $0.10 per Unit for gross aggregate proceeds of $665,000. Each Unit in the first non-flow-through offering consisted of one common share of the Company and one common share purchase warrant. Each warrant entitling the holder thereof to acquire one common share of the Company at a price of $0.20 for a period of two (2) years following the closing of the first non-flow-through offering.
The second Unit Offering was closed at a subscription price of $0.12 per Unit for gross aggregate proceeds of $835,000. Each Unit in the second non-flow-through offering consisted of one common share of the Company and one common share purchase warrant. Each warrant entitling the holder thereof to acquire one common share of the Company at a price of $0.16 for a period of three (3) years following the closing of the second non-flow-through offering.
Certain Directors and Officers of the Company participated in the private placement and acquired direction and control over an aggregate 1,875,001 Non-Flow-Through Units at a subscription price of $0.12 per Unit. Each such placement to those persons constitutes a “related party transaction” within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The issuance is exempt from the formal valuation and minority
shareholder approval requirements of MI 61-101 as the fair market value of the Units issued to or the consideration paid by such insider did not exceed 25% of the Company’s market capitalization.
In connection with the closing of the equity offerings, the Company paid aggregate cash commissions of $80,507.60 to certain arm’s-length finders, representing 6% of the gross proceeds raised on the sale of the FT Units and Unit Offerings placed by such finder within the amount permitted by the policies of the TSX Venture Exchange (the “Exchange”).
In addition, in connection with the closing of the equity offerings, the Company issued an aggregate 802,980 non-transferable finders’ warrants (the “Finder’s Warrants”) to certain eligible finders (the “Finder’s Warrants”), each Finder’s Warrant will entitle the holder thereof to purchase additional common shares in the capital of the Company (a “Finder’s Warrant Share”) on the same terms as the respective warrants issued pursuant to the Equity Offerings based on 6% of the gross proceeds raised on the sale of the FT Units and Unit Offerings placed by such finder.
All securities issued in connection with the Offering are subject to a statutory hold period expiring on March 20, 2021 in accordance with applicable securities legislation.
Shares for Debt
Lastly, the Company reports that it has issued 2,043,217 common shares of Lake Winn (the “Debt Settlement Shares”) for the settlement of up to $245,186 of trade payables (the “Debt Settlement“). Pursuant to the Debt Settlement, the Debt Settlement Shares were issued at a deemed price of $0.12 per Share to certain creditors of the Company (the “Creditors“).
Debt settled by insiders of the Company accounted for 659,375 Debt Settlement Shares representing approximately $79,125 of the Debt Settlement. Such participation constituted a “related party transaction” within Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The issuance to the insiders is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as the fair market value of the shares issued, or the consideration paid by such person, did not exceed 25% of the Company’s market capitalization.
The Debt Settlement Shares issued will be subject to a four month hold period which will expire on March 20, 2021.
The Company also granted 2,900,000 options at $0.23 for a period of 5 years to directors, officers and consultants.
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 release.
For further information contact:
CEO and Director
Lakewinn Resources Corp.
Telephone: (604) 218-8772
Cautionary Statement Regarding “Forward-Looking” Information
Certain statements contained in this press release may constitute forward-looking statements. Such forward-looking statements are based upon the Company’s reasonable expectations at the date hereof, which are subject to change depending on economic, political and competitive circumstances and contingencies. Readers are cautioned that such forward looking statements involve known and unknown risks, uncertainties and other factors that may cause a change in such assumptions and the actual outcomes and estimates to be materially different from those estimated or anticipated future results, achievements or position expressed or implied by those forward-looking statements. Risks, uncertainties and other factors that could cause the Company’s plans or prospects to change include changes or disruptions in the securities markets; legislative, political or economic developments. The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described in this news release in the United States. Such 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, accordingly, may not be offered or sold within the United States, or to or for the account or benefit of persons in the United States or “U.S. Persons”, as such term is defined in Regulation S promulgated under the U.S. Securities Act, unless registered under the U.S. Securities Act and applicable state securities laws or pursuant to an exemption from such registration requirements.