Canada Iron Announces Closing of Private Placement and Debt Settlement

May 06, 2021 10:45 AM EDT | Source: Canada Iron Inc.

Toronto, Ontario--(Newsfile Corp. - May 6, 2021) - Canada Iron Inc. (the "Company" or "Canada Iron") is pleased to announce that it closed a non-brokered private placement (the "Private Placement") for gross proceeds of $60,000. Pursuant to the Private Placement, the Company issued 13,974,122 units ("Units") at a price of $0.0042937 per Unit, with each Unit consisting of one common share (a "Common Share") and one-half of one common share purchase warrant (each whole warrant, a "Warrant"). Each Warrant entitles the holder thereof to acquire one additional Common Share (each, a "Warrant Share") at a price of $0.0601111 per Warrant Share on the earlier of: (i) five years following the closing date of the Private Placement and (ii) three years following the closing of the Company's proposed business combination with Humble & Fume Inc., as previously disclosed in the Company's February 23, 2021 news release.

The Company also completed a debt settlement transaction (the "Debt Settlement") with certain creditors of the Company. Pursuant to the Debt Settlement, the Company issued 25,153,420 Units in settlement of $108,000 of indebtedness of the Company.

All securities issued pursuant to the Private Placement and Debt Settlement are subject to a statutory hold period of four months and one day.

Related Party Transaction

The Private Placement and Debt Settlement constitute a "related party transaction" under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). However, the Private Placement and Debt Settlement are exempt from the formal valuation requirements set out in MI 61-101 as at the time of the transaction, the securities of the Company were not listed or quoted on one of the exchanges or markets specifically identified in MI 61-101. The Private Placement and Debt Settlement are exempt from the minority shareholder approval requirements set out in MI 61-101 pursuant to the financial hardship exemption, which provides an exemption where the financial hardship criteria set out in Subsection 5.5(g) of MI 61-101 are met and where there is no other requirement, corporate or otherwise, to hold a meeting to obtain any approval of the holders of any class of affected securities.

The Company did not file a material change report related to the Private Placement and Debt Settlement more than 21 days before the expected closing of the Private Placement and Debt Settlement as required by MI 61-101 as (i) the Company requires the consideration it will receive in connection with the Private Placement and Debt Settlement immediately for working capital purposes, and (ii) the Company would like to settle the debt under the Debt Settlement as soon as possible.

Early Warning Report

Prior to the Private Placement and Debt Settlement, L5 Capital Inc., a corporation with a head office in Vancouver, British Columbia, held 50,000,000 Common Shares. Pursuant to the Private Placement and Debt Settlement, L5 Capital Inc. acquired, for aggregate consideration of $15,000 in connection with the Private Placement and $27,000 of debt settled in connection with the Debt Settlement, ownership of (i) 9,781,813 Common Shares, which, together with the Common Shares held prior to the Private Placement and Debt Settlement, represents approximately 21.97% of the issued and outstanding Common Shares on a non-diluted basis, and (ii) 1,746,765 Warrants, which together with the acquired Common Shares, and assuming full exercise of the Warrants, represents approximately 22.47% of the issued and outstanding Common Shares on a partially diluted basis (assuming exercise of L5 Capital Inc.'s convertible securities). The Units acquired pursuant to the Private Placement and Debt Settlement were acquired by L5 Capital Inc. for investment purposes, and depending on market and other conditions, it may from time to time in the future increase or decrease its ownership, control or direction over securities of the Company through market transactions, private agreements, or otherwise.

Prior to the Private Placement and Debt Settlement, Jason I. Goldman Professional Corporation a corporation with a head office in Toronto, Ontario, held 50,000,000 Common Shares. Pursuant to the Private Placement and Debt Settlement, Jason I. Goldman Professional Corporation acquired, for aggregate consideration of $15,000 in connection with the Private Placement and $27,000 of debt settled in connection with the Debt Settlement, ownership of (i) 9,781,813 Common Shares, which, together with the Common Shares held prior to the Private Placement and Debt Settlement, represents approximately 21.97% of the issued and outstanding Common Shares on a non-diluted basis, and (ii) 1,746,765 Warrants, which together with the acquired Common Shares, and assuming full exercise of the Warrants, represents approximately 22.47% of the issued and outstanding Common Shares on a partially diluted basis (assuming exercise of Jason I. Goldman Professional Corporation's convertible securities). The Units acquired pursuant to the Private Placement and Debt Settlement were acquired by Jason I. Goldman Professional Corporation for investment purposes, and depending on market and other conditions, it may from time to time in the future increase or decrease its ownership, control or direction over securities of the Company through market transactions, private agreements, or otherwise.

Copies of the respective early warning reports that will be filed by L5 Capital Inc. and Jason I. Goldman Professional Corporation may be obtained on the Company's SEDAR profile or by contacting Michael Lerner, the Company's CEO and CFO, at 416-869-1234.

About Canada Iron Inc.

Canada Iron Inc. is a mineral exploration company with no current activities or operations.

Cautionary Note Regarding Forward-looking Statements

This press release contains "forward-looking statements". Forward-looking statements can be identified by words such as: anticipate, intend, plan, goal, seek, believe, project, estimate, expect, strategy, future, likely, may, should, will and similar references to future periods. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. The forward-looking statements and information are based on certain key expectations and assumptions made by the Company.

Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. Except as required by applicable securities laws, we undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise

On behalf of the Board of Directors
Michael Lerner
Chief Executive Officer, Chief Financial Officer & Director
T: 416-710-4906
E: mlerner10@gmail.com

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/83173

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