VANCOUVER, BC, Oct. 26, 2020 /CNW/ – Tilting Capital Corp. (“TLL” or the “Company“) (NEX: TLL.H) is pleased to announce that it has filed a filing statement dated October 23, 2020 (the “Filing Statement“) with the TSX Venture Exchange (the “TSXV“) for the acquisition of Gold Line Resources Ltd. (“GLR“).
Summary of the Transaction
On August 10, 2020, the Company entered into a definitive amalgamation agreement (the “Amalgamation Agreement“) with GLR and 1257120 B.C. Ltd., a wholly-owned subsidiary of the Company (“Tilting SubCo“), pursuant to which Tilting SubCo will amalgamate with GLR, shareholders of GLR will exchange their shares of GLR for shares of TLL on a one-for-one basis, and GLR will become a wholly-owned subsidiary of TLL (the “Transaction“). Upon completion of the Transaction, the Company will change its name to “Gold Line Resources Ltd.” and will carry on the business previously carried on by GLR.
The TSX-V has provided conditional approval for the Transaction, the proposed name change, and the Private Placement (as defined below). The Transaction is expected to close on or about October 28, 2020.
Additional information concerning the Transaction, GLR, TLL and the resulting issuer is provided in the Company’s news releases dated May 26, 2020 and August 10, 2020, and the Filing Statement, all of which are available under TLL’s SEDAR profile at www.sedar.com.
In accordance with the policies of the TSX-V, TLL’s common shares are currently halted from trading and are expected to remain so until completion of the Transaction.
Private Placement
In connection with the Transaction, TLL completed a non–brokered private placement (“Private Placement“) of subscription receipts (“Subscription Receipts“) at a price of $0.25 per Subscription Receipt. The Company raised gross proceeds of $6,003,250 from the sale of 24,013,000 Subscription Receipts pursuant to the Private Placement.
Each Subscription Receipt will be automatically converted, without payment of additional consideration or further action by the holder thereof, immediately prior to completion of the Transaction (as defined below), into one unit of the Company. Each unit will be comprised of one common share of the Company (each, a “TLL Share“) and one non-transferable common share warrant to purchase, for a period of 24 months from the date of issue, one additional TLL Share at an exercise price of $0.40 per TLL Share, subject to acceleration. In consideration for introducing certain subscribers to the Private Placement, the Company agreed to issue 380,400 non-transferable broker warrants, each entitling the holder thereof to acquire one TLL Share at an exercise price of $0.25, and pay cash finder’s fees totalling $95,100 to certain finders.
All Subscription Receipts issued pursuant to the Private Placement are subject to a statutory hold period of four months plus one day from the date of closing, in accordance with applicable Canadian securities legislation, expiring on December 13, 2020.
Directors and officers of the Company purchased an aggregate of 40,000 Subscription Receipts under the Private Placement constituting, to that extent, a “related party transaction” under Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61–101“). The Company is relying on the exemptions from the valuation and minority shareholder approval requirements of MI 61–101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101, as the fair market value of the participation in the Private Placement by insiders does not exceed 25% of the market capitalization of the Company, as determined in accordance with MI 61-101. The Company did not file a material change report more than 21 days before the expected closing of the Private Placement, which the Company deemed reasonable in the circumstances so that it could close the Private Placement as soon as practicable for sound business reasons.
