Vancouver, British Columbia--(Newsfile Corp. - November 30, 2023) - Lincoln Ventures Ltd.(TSXV: LX.H) ("Lincoln" or the "Company") is pleased to announce that it has entered into a binding letter agreement dated November 15, 2023 (the "LOI") with Prism Diversified Ltd. ("Prism") to acquire Prism's lithium assets and land holdings ("Assets") located in Alberta, Canada (the "Acquisition"). The LOI sets out the general framework for the Acquisition and related transactions (the "Transaction") and adjustments may be made to the valuation of the Assets prior to closing. On closing of the Transaction, Lincoln intends to change its name to 'LithAlta Projects Ltd.' (the "Resulting Issuer"). Lincoln and Prism are arm's length parties.
Trading in the common shares of Lincoln was halted on November 16, 2023, and will remain halted pending completion of the Transaction and the Company's receipt of TSX Venture Exchange's (the "TSX-V") approval. It is anticipated that following the closing of the Transaction, the Company's common shares will trade on the TSX-V. Lincoln will issue a comprehensive press release once the parties execute a definitive agreement.
Summary of the Transaction
Acquisition
In connection with the Acquisition, Lincoln will consolidate its common shares on a 1:3.03 basis (such shares after giving effect to the consolidation, the "Lincoln Consolidated Shares"). All of the existing outstanding stock options and Class B shares of Lincoln will be subject to the same consolidation ratio. Lincoln will acquire the Assets from Prism by issuing 29,118,291 of the Lincoln Consolidated Shares to Prism, at a deemed price of $0.50 per Lincoln Consolidated Share, for approximate consideration of $14,559,145.
Private Placement
In connection with the Acquisition, and prior to closing of the Transaction, Lincoln will use reasonable commercial efforts to complete a private placement financing of up to 7,000,000 Lincoln Consolidated Shares, at $0.50 per share, for total proceeds of not less than $2.5 million ("Private Placement"). Further particulars regarding the Private Placement will be disclosed in a subsequent news release.
Finders' Fees
Upon completion of the Transaction, Lincoln will pay a finders' fee of 200,000 Lincoln Consolidated Shares to one finder.
On closing of the Transaction (including the Private Placement and payment of the Finders' Fees), it is anticipated that the Resulting Issuer will have approximately 46,877,161 common shares issued and outstanding of which 10,758,870 (approximately 22.95%) will be held by existing Lincoln shareholders, (along with the Finder), 29,118,291 (approximately 62.12%) will be held by Prism, and 7,000,000 (approximately 14.93%) will be held by participants from the Private Placement.
Reconstitution of the Board and Management of the Resulting Issuer
On closing of the Transaction, the board of directors of the Resulting Issuer is expected to be composed of John Proust, Murray Flanigan, and John Merritt, and management of the Resulting Issuer is expected to be composed of John Merritt as Chief Executive Officer, Vince Boon as Chief Financial Officer, and Eileen Au as Corporate Secretary.
Resale Restrictions
Upon completion of the Transaction, common shares of the Resulting Issuer held by individuals or entities who are principals of the Resulting Issuer will be placed in escrow pursuant to the policies of the TSX-V, under the terms of a Tier 2 Surplus Security Escrow Agreement.
Common shares of the Resulting Issuer issued in connection with the Transaction may be subject to the TSX-V's Seed Share Resale Restrictions. In addition, a portion of the common shares (the "Pooled Shares") of the Resulting Issuer that are issued to Prism pursuant to the Acquisition are anticipated to be subject to additional voluntary pooling restrictions with release terms more restrictive than, and which will run concurrently with, those imposed by the Tier 2 Surplus Security Escrow Agreement or the Seed Share Resale Restrictions. In particular, 35% of the Pooled Shares will be released (in 5% tranches every 6 months, with the first release occurring upon completion of the Transaction) over a period of 3 years, and 65% of the Pooled Shares will be released based on the Resulting Issuer meeting certain targets. Additional details of the voluntary pooling restrictions will be set out in the disclosure document referenced below.
Conditions to Closing
The closing of the Transaction is subject to various conditions, including the parties negotiating and entering into a definitive agreement, obtaining the approval of their respective shareholders, if required, and obtaining all required regulatory and stock exchange approvals. In addition, the closing of the Transaction is subject to Lincoln completing the Private Placement.
Disclosure Document
A disclosure document in respect of the Transaction will be prepared, sent to Lincoln and Prism and filed on SEDAR+ at www.sedarplus.ca in accordance with TSX-V policies. A press release will be issued by Lincoln once the disclosure document has been filed on SEDAR+.
Shareholder Approval
At this time, and in accordance with the policies of the TSX-V, the Company does not anticipate seeking shareholder approval for the Transaction as the Transaction is not a related party transaction, the Company is listed on the NEX without active operations, the Issuer is not subject to a cease trade order, and shareholder approval is not required under applicable corporate and securities laws.
For more information, contact:
John G. Proust
President, Lincoln Ventures Ltd.
Tel: 778-725-1487
Email: jproust@jproust.ca
Disclaimer
Completion of the Transaction is subject to a number of conditions, including but not limited to, TSX-V acceptance and if applicable pursuant to TSX-V requirements, majority of the minority shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all. The TSX-V has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.Neither TSX-V nor its Regulation Services Provider (as that term is defined in policies of the TSX-V) accepts responsibility for the adequacy or accuracy of this release.
The information in this news release includes certain information and statements about management's view of future events, expectations, plans and prospects that constitute forward looking statements. These statements are based upon assumptions that are subject to significant risks and uncertainties. Forward looking statements in this news release include, but are not limited to, the terms of the Transaction and consideration paid by the Company thereunder, the entering into a definitive agreement, closing of the Transaction, launching and completion of the Private Placement, the Company issuing future news releases, and name of the Resulting Issuer, and the composition of board and management of the Resulting Issuer. Because of these risks and uncertainties and as a result of a variety of factors, including with respect to the closing of the Transaction, the timing and receipt of all applicable regulatory, corporate and third-party approvals, the anticipated benefits from the Transaction and the satisfaction of other conditions to closing, the actual results, expectations, achievements or performance may differ materially from those anticipated and indicated by these forward-looking statements. Although the Company believes that the expectations reflected in forward looking statements are reasonable, it can give no assurances that the expectations of any forward-looking statement will prove to be correct. Except as required by law, the Company disclaims any intention and assumes no obligation to update or revise any forward-looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward-looking statements or otherwise. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. 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 and forward-looking information. The Company will not update any forward-looking statements or forward-looking information that is incorporated by reference herein, except as required by applicable securities laws.
The securities described herein have not been registered under the U.S. Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements under the U.S. Securities Act and any applicable state securities laws.
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