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NBS Capital Inc. Completes Subscription Receipt Financing for Aggregate Proceeds of $5 Million

Thursday, 18 February 2021 10:20 AM

NBS Capital Inc.

NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWS WIRES

OTTAWA, ON / ACCESSWIRE / February 18, 2021 / NBS Capital Inc. ("NBS" or the "Company") (TSXV:NBS.P) announces further to its press release of January 4, 2021, that in connection with its proposed scheme of arrangement (the "Arrangement") with Electric Metals (USA) Limited ("EML"), EML and NBS have completed the non-brokered private placements (the "Financing") of subscription receipts (the "Subscription Receipts") in multiple tranches for aggregate gross proceeds of Cdn$5,049,635.13, at a price of Cdn$0.33 per Subscription Receipt. Pursuant to the fully subscribed Financing, EML issued a total of 13,308,407 Subscription Receipts for proceeds of Cdn$4,391,774.85, and NBS issued a total of 1,993,516 Subscription Receipts for proceeds of Cdn$657,860.28.

The additional proceeds raised in connection with the Financing by EML (net of certain professional and financing fees), together with proceeds previously raised as announced on January 4, 2021, have been (such funds together, the "Escrowed Funds") delivered to and are being held in escrow on behalf of the subscribers by TSX Trust Company (the "Escrow Agent") and invested in an interest-bearing account pending the satisfaction or waiver (to the extent such waiver is permitted) of certain escrow release conditions (the "Escrow Release Conditions") as set out in the Company's January 4, 2021 press release on or before the 120th day after the closing of the Financing (the "Termination Date"), in accordance with the provisions of subscription agreements entered into with the subscribers in the Financing and subscription receipt agreements entered into with the Escrow Agent.

Each Subscription Receipt shall entitle the holder thereof to receive, upon the satisfaction or waiver (to the extent such waiver is permitted) of the Escrow Release Conditions on or before the Termination Date, without payment of additional consideration or further act or formality on the part of the holder thereof, one ordinary share in the capital of EML (each, an "Underlying Share") and one-half of one ordinary share purchase warrant of EML (each whole such warrant, an "Underlying Warrant"). Each whole Underlying Warrant will entitle the holder to acquire one share of the Resulting Issuer (as defined below) at an exercise price of $0.60 per share for a period of two years from the closing of the Arrangement (the "Warrant Expiry Date"). The Warrant Expiry Date may be accelerated upon notice to the Underlying Warrant holders should the closing price of the shares of the Resulting Issuer (as defined below) on the TSX Venture Exchange (the "TSXV") be greater than $1.00 for twenty consecutive trading days.

If the Arrangement is completed, each Underlying Share will then be exchanged for one common share of NBS (the "Resulting Issuer" after completion of the proposed Arrangement) and each Underlying Warrant will, upon exercise in accordance with its terms, entitle the holder thereof to one common share (on a post-Consolidation basis) of the Resulting Issuer. In the event the Escrow Release Conditions are satisfied, and the Proposed Transaction is completed, the Escrowed Funds will be released to the Resulting Issuer. The Resulting Issuer intends to use the Escrowed Funds to fund the exploration of EML's Corcoran Canyon Silver Project, pay for expenses of the Financing and the Arrangement, and for general working capital purposes. NBS will consolidate its outstanding common shares on the basis of 0.73271 new common shares for each currently issued common shares. All securities issued in connection with the Arrangement (including those issued in exchange for each Underlying Share and upon exercise of each Underlying Warrant) will be issued on a post-consolidated basis.

In the event that: (i) the Escrow Agent does not receive the Release Notice at or prior to 11:59 p.m. (Toronto time) on the Termination Date, or (ii) if prior to the Termination Date, the Company advises the subscribers or announces to the public that it does not intend to satisfy the Escrow Release Conditions, the Subscription Receipts will be null and void and of no further effect, and the Escrow Agent will return to each holder of Subscription Receipts an amount equal to the aggregate subscription price of the Subscription Receipts held by such holder plus a pro rata portion of any interest and other income earned on the Escrowed Funds, less applicable withholding taxes, if any. EML will be responsible and liable to the holders of Subscription Receipts for any shortfall between the aggregate Subscription Price and the Escrowed Funds.

Any securities issued by the Resulting Issuer in connection with the Financing will be in addition to the Resulting Issuer common shares that will be distributed to the current EML ordinary shareholders in connection with the Arrangement. Investors in the Financing will hold approximately 23.44% of the issued and outstanding Resulting Issuer common shares following completion of the Arrangement, on a non-diluted basis.

Amendment to Implementation Agreement

NBS also wishes to advise that the implementation agreement with EML in connection with the Arrangement dated December 31, 2020 (the "Arrangement Agreement") has been amended ("Amending Agreement") effective February 15, 2021 to provide that the "Reimbursement Fee" (as defined in the Arrangement Agreement) will be the lesser of (i) $C100,000 and (ii) 1% of the equity value of EML. Copy of the Arrangement Agreement and the Amending Agreement are both available on www.SEDAR.com under NBS' profile.

Cautionary Note Regarding Forward-Looking Statements

This press release contains certain "Forward-Looking Statements" within the meaning of applicable securities legislation relating to the proposal to complete the Proposed Transaction and associated transactions, including statements regarding the terms and conditions of the Proposed Transaction, the Concurrent Financing, the use of proceeds of the Concurrent Financing, and the business of the Resulting Issuer. The information about EML contained in the press release has not been independently verified by the Company. We use words such as "might", "will", "should", "anticipate", "plan", "expect", "believe", "estimate", "forecast" and similar terminology to identify forward looking statements and forward-looking information. Such statements and information are based on assumptions, estimates, opinions and analysis made by management in light of its experience, current conditions and its expectations of future developments as well as other factors which it believes to be reasonable and relevant. Forward-looking statements and information involve known and unknown risks, uncertainties and other factors that may cause our actual results to differ materially from those expressed or implied in the forward-looking statements and information and accordingly, readers should not place undue reliance on such statements and information. Although the Company believes, in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate, that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because the Company can give no assurance that they will prove to be correct. In evaluating forward-looking statements and information, readers should carefully consider the various factors which could cause actual results or events to differ materially from those expressed or implied in the forward looking statements and forward-looking information depending on, among other things, the risks that the parties will not proceed with the Proposed Transaction, the Concurrent Financing and/or other associated transactions, that the ultimate terms of the Proposed Transaction, the Concurrent Financing and/or other associated transactions will differ from those currently contemplated, and that the Proposed Transaction, the Concurrent Financing and/or other associated transactions will not be successfully completed for any reason (including the failure to obtain the required approvals or clearances from regulatory authorities). The statements in this press release are made as of the date of this release. The Company undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of the Company, EML, their respective securities, or their respective financial or operating results (as applicable).

Completion of the transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable pursuant to Exchange 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.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

The TSXV 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 the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

This press release is intended for distribution in Canada only and is not intended for distribution to United States newswire services or dissemination in the United States. The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from the U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States.

All information contained in this press release relating to EML was provided by EML to NBS for inclusion herein. NBS has not independently verified such information and shall bear no liability for any misrepresentation contained therein.

About NBS Capital Inc.

The only business of NBS is the identification and evaluation of assets or businesses with a view to completing a "Qualifying Transaction" in accordance with the policies of the TSXV.

Investors are cautioned that trading in the securities of a capital pool company should be considered highly speculative. For further information, contact: NBS Capital Inc. Paul Barbeau, Chief Executive Officer and Director. Phone: 613-232-1567 x 201.

About Electric Metals (USA) Limited

EML is a public, unlisted company incorporated under the laws of New South Wales, Australia. It is a US-based resource company, with its material asset being the 100% owned Corcoran Canyon Silver Project in Nevada. EML also holds a high-grade manganese project in Minnesota, USA.

SOURCE: NBS Capital Inc.

Topic:
Financing
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