RE:RE:Reverse stock splitMilotica wrote: Where did you see or read about this reverse split? I do not see it anywhere.
Management Information Circular 22 October 2021
page 8
Annual General Meeting (resolution passed)
To consider and, if deemed advisable, to approve with or without variation, a special resolution authorizing an amendment to the Company’s articles to complete a consolidation (the “Consolidation”) of the Company’s issued and outstanding common shares (the “Common Shares”) on the basis of one (1) postConsolidation Common Share for between ten (10) and eighteen (18) preConsolidation Common Shares, as determined by the Board in its sole discretion and as more particularly described in the accompanying Circular;
page 16 - 18
6. Consolidation At the Meeting, Shareholders will be asked to consider and, if deemed advisable, to approve with or without variation, a special resolution in the form set out below (the “Consolidation Resolution”), authorizing an amendment to the Articles to effect the Consolidation of the Company’s issued and outstanding Common Shares on the basis of one (1) post-Consolidation Common Share for between ten (10) and eighteen (18) pre-Consolidation Common Shares, as determined by the Board in its sole discretion. Required Approvals and Effective Date
The ability of the Board to effect the Consolidation is subject to the approval of Shareholders at the Meeting and the acceptance of the TSXV. The Consolidation must be passed by a “special resolution” of Shareholders. A “special resolution” is a resolution passed by a majority of not less than two-thirds of the votes cast by Shareholders (in person or by proxy).
The Consolidation will take effect on a date to be coordinated with the TSXV. The Company will announce by news release the effective date of the Consolidation. Notwithstanding the foregoing, even if the Consolidation Resolution is approved by Shareholders at the Meeting, the Board may elect not to proceed with the Consolidation, in its sole discretion. The Board will continue to assess market conditions and the interests of the Company and Shareholders before proceeding to effect the Consolidation, if at all.
Principal Reasons for Effecting the Consolidation The Board has not concluded if or when it might want to undertake the Consolidation to reduce the number of Common Shares outstanding, but there are three considerations that will likely determine whether to proceed. First, the Company believes an increased Common Share price will allow it to attract certain individual and institutional investors who have minimum share price thresholds for equity investments, which thresholds preclude them from investing in ‘penny stocks’. Second, the Company may pursue a secondary listing on a securities exchange in the United States, which has certain minimum share price requirements. The Company believes that a secondary listing could attract new investors given the strong demand for equity investments in battery materials, recycling and electric vehicle companies in the United States. The third consideration is the timing to affect a Consolidation. Management has studied many consolidations and believes that in order to be successful, they should be preceded by a significant event, milestone or catalyst. As at October 21, 2021, the last trading day prior to the date of this Circular, the closing price of the Common Shares on the TSXV was $0.305. With guidance from financial advisors, the Company believes a total Common Share count below 60,000,000 will better position the Company for future investment by North American institutional investors while maintaining appropriate trading liquidity and meeting minimum United States listing thresholds. The current Common Share count arose through a merger with an Australian company, where higher outstanding shares are more common. Principal Effects of the Consolidation On October 21, 2021, the Company had 540,414,476 Common Shares issued and outstanding. Should the Board proceed with the minimum allowable Consolidation on the basis of one (1) post-Consolidation Common Share for every ten (10) pre-Consolidation Common Shares, the number of post-Consolidation Common Shares issued and outstanding will be approximately 54,041,448 (on a non-diluted basis). Should the Board proceed with the maximum allowable Consolidation on the basis of one (1) post-Consolidation Common Share for every eighteen (18) pre-Consolidation Common Shares, the number of postConsolidation Common Shares issued and outstanding will be approximately 30,023,026 (on a non-diluted basis). 17 The implementation of the Consolidation would not affect the total Shareholders’ equity of the Company or any components of Shareholders’ equity as reflected on the Company’s financial statements except: (i) to change the number of issued and outstanding Common Shares; and (ii) to change the number of outstanding stock options, Common Share purchase warrants, RSUs, DSUs and PSUs of the Company, as well as their relative exercise prices, to reflect the Consolidation. The Consolidation will not materially change any Shareholder’s proportion of votes to total votes; however, if the Consolidation is effected by the Board, the total number of votes that a Shareholder may cast at any future Shareholder meeting of the Company will be reduced. Any fractional Common Share resulting from the Consolidation will be rounded to the nearest whole number. If the Name Change Resolution (as defined above) is approved by Shareholders, the Company may choose to effect the Consolidation concurrently with the Name Change or proceed with the Name Change or Consolidation independent of one another. Risk Factors The effect of the Consolidation upon the market price of the Common Shares cannot be predicted with any certainty, and the history of share consolidations for corporations similar to the Company is varied. There can be no assurance that the total market capitalization of the Common Shares immediately following the Consolidation will be equal to or greater than the total market capitalization immediately before the Consolidation. Similarly, there can be no assurance that a lower share count will not impact liquidity. In addition, there can be no assurance that the per-Common Share trading price of the Common Shares following the Consolidation will remain higher than the per-Common Share trading price immediately before the Consolidation or equal or exceed the direct arithmetical result of the Consolidation. In addition, a decline in the trading price of the Common Shares after the Consolidation may result in a greater percentage decline than would occur in the absence of the Consolidation. Furthermore, the Consolidation may lead to an increase in the number of current Shareholders who will hold “odd lots” of Common Shares; that is, a number of Common Shares not evenly divisible into “board lots” (a board lot is either 100, 500 or 1,000 Common Shares, depending on the price of the Common Shares). As a general rule, the cost to Shareholders transferring an odd lot of Common Shares is somewhat higher than the cost of transferring a board lot. As a result, transaction costs associated with transferring Common Shares may be increased for certain Shareholders that hold an odd lot of Common Shares following the Consolidation. There are additional risks and uncertainties related directly to the Company that could affect the value of the Common Shares including the risk factors discussed in management’s discussion and analysis for the year ended December 31, 2020 filed on SEDAR under the Company’s profile at www.sedar.com. Effect on Common Share Certificates If the Board elects to effect the Consolidation, in its sole discretion, the Company shall issue a news release announcing the terms, the exchange ratio and the effective date of the Consolidation before the Company files an amendment to the Articles with the authorities that administer the CBCA. The Company will also prepare a letter of transmittal (the “Letter of Transmittal”). Following an announcement of an effective date of the Consolidation (if any), in order to obtain a certificate or certificates representing the post-Consolidation Common Shares after giving effect to the Consolidation, each Registered Shareholder shall complete and execute the Letter of Transmittal and deliver the same to AST Trust, together with their Common Share certificates representing their pre-Consolidation Common Shares in accordance with the instructions set out in the Letter of Transmittal. The certificates that are surrendered shall be exchanged for new certificates representing the number of post-Consolidation Common 18 Shares to which such Registered Shareholder is entitled as a result of the Consolidation. No delivery of a new certificate to a Registered Shareholder will be made until the Registered Shareholder has surrendered his, her or its existing certificates representing the preConsolidation Common Shares. In the event that the Consolidation is not implemented, all Common Share certificates delivered pursuant to a Letter of Transmittal will be returned to the respective Registered Shareholders. In addition, after the exchange of pre-Consolidation Common Share certificates for post-Consolidation Common Share certificates, shareholders will have no further interest with respect to any fractional post-Consolidated Common Shares. PRIOR TO AN ANNOUNCEMENT OF AN EFFECTIVE DATE OF THE CONSOLIDATION (IF ANY), SHAREHOLDERS SHOULD NOT DESTROY ANY COMMON SHARE CERTIFICATES AND SHOULD NOT DELIVER THEIR COMMON SHARE CERTIFICATES OR THE LETTER OF TRANSMITTAL TO THE COMPANY OR AST TRUST. Only Registered Shareholders are required to complete, sign and submit the appropriate Letter of Transmittal as described above. Non-Registered Shareholders are not required to submit a Letter of Transmittal. The intermediary or clearing agency, through whom the NonRegistered Shareholder holds the pre-Consolidation Common Shares will take the appropriate steps to ensure the holder’s accounts are adjusted to reflect the exchange ratio, as applicable. If you hold your Common Shares with an intermediary and you have questions in this regard, you are encouraged to contact your intermediary. No Dissent Rights Under the CBCA, shareholders do not have any dissent and appraisal rights with respect to the proposed Consolidation. If the Company implements the Consolidation, the Company will not independently make such rights available to shareholders. Shareholder Approval Authorizing the Consolidation The Board recommends that Shareholders vote FOR the Consolidation Resolution. To be effective, the Consolidation Resolution must be approved by no less than twothirds of the votes cast by the holders of Common Shares present in person, or represented by proxy, at the Meeting. Accordingly, unless a Shareholder specifies in the accompanying proxy that its Common Shares are to be voted against the Consolidation Resolution, the persons named in the accompanying proxy intend to vote FOR the Consolidation Resolution. The text of the Consolidation Resolution to be submitted to Shareholders at the Meeting is set forth below: “NOW THEREFORE BE IT RESOLVED AS A SPECIAL RESOLUTION THAT: 1. the Articles of First Cobalt Corp. (the “Company”) be amended to provide that: (a) the authorized share capital of the Company is altered by consolidating all of the issued and outstanding common shares of the Company (the “Consolidation”) on the basis of one (1) post-Consolidation common share for between ten (10) and eighteen (18) pre-Consolidation common shares, with such final exchange ratio to determined by the board of directors of the Company (the “Board”) in its sole discretion; (b) any fractional common share arising post-Consolidation of the common shares of the Company will be rounded to the nearest whole common shares; 2. any director or officer of the Company is hereby authorized and directed, acting for, in the name of and on behalf of the Company, to execute or cause to be executed, under the seal of the Company or otherwise and to deliver or to cause to be delivered, all such other deeds, documents, instruments and assurances and to do or cause to be done all such other acts as in the opinion of such director or officer of the Company may be necessary or desirable to carry out the terms of the foregoing resolutions; and 19 3. notwithstanding that this resolution has been duly passed by the shareholders, the Board is hereby authorized and empowered, if it decides not to proceed with this resolution, to revoke this resolution, in its sole discretion, in whole or in part at any time prior to it being given effect without further notice to, or approval of, the shareholders.