Avalon Completes $0.75 million Preferred Share Financing and $140,000 First Tranche of Private Placement
Avalon Completes $0.75 million Preferred Share
Financing and $140,000 First Tranche of Private
Placement
Toronto, Ontario--(Newsfile Corp. - June 29, 2018) -
Avalon
Advanced Materials
Inc.
(TSX: AVL) (OTCQX: AVLNF) ("Avalon"
or the "Company") is pleased to announce that it has completed a non-brokered private placement
financing consisting of 150
Series C1 Preferred Shares (the "Preferred Shares") on a private placement basis at a price of $5,000 per Preferred Share for
gross proceeds of $750,000 with an entity managed by The Lind Partners ("Lind"), a New York based asset management firm
(the "Agreement").
The Preferred Shares do not carry a dividend and have a redemption value per share that starts at $5,000 and increases by
$250 per share each quarter over the next 24 months, to a cap of $6,750 per share. After the four month Hold Period (defined
below), the Preferred Shares can be converted by Lind into common shares of the Company at a price per common share equal
to 85% of the five-day volume weighted average price of the common shares on the Toronto Stock Exchange (the "TSX")
immediately prior to the date that notice of conversion is given.
In conjunction with the closing, Lind will receive a commitment fee of $37,500 and 3,750,000
common share purchase warrants.
Each warrant entitles the holder to purchase one common share of the Company at a price of $0.125 per common share until 60
months after today.
Pursuant to Canadian securities laws, the securities issuable under this private placement will be subject to a hold period (the
"Hold Period"), which expires four months and one day after closing. After the Hold Period, Lind has the basic right to convert 10
Preferred Shares into common shares of the Company on a monthly basis, subject to certain conversion limits set out in the
Agreement; however, Lind is permitted to convert up to 30 Preferred Shares on a monthly basis in the event such amount does
not exceed 20% of the Company's 20-day traded volume of common shares on the TSX immediately prior to the date of delivery
of a conversion notice.
Lind will also be entitled to accelerate its conversion right to the full amount of the redemption value applicable at such time, or
demand repayment of the applicable redemption value per share in cash, upon the occurrence of certain events as set out in the
Agreement. The Company has the right to redeem the Preferred Shares at any time after the Hold Period at a small premium to
the redemption value. The Company has floor price protection such that if any conversion results in an effective conversion price
of less than $0.10 per common share, then the Company has the right to deny the conversion and instead redeem the Preferred
Shares that were subject to that conversion for the redemption amount in cash plus a 5% premium.
At any time while any Preferred Shares are outstanding, Lind has the option of subscribing for up to an additional 50 Series C2
Preferred Shares at a price of $5,000 per share and under the same terms and conditions as the initial financing, subject to
certain triggering events and subject to the prior approval of the TSX.
The Company has received conditional approval of the TSX in connection with the completion of the Series C1 Preferred Share
private placement.
Private Placement
In addition to the above transaction, the Company has also completed the first tranche of a non-brokered private placement
consisting of 1,400,000 units at a price of $0.10 per unit for gross proceeds of $140,000.
Each unit was comprised of one common share and one common share purchase warrant. Each warrant entitles the holder to
acquire one common share at a price of $0.12 for a period of 24 months from today, or, if at any time following today, the closing
price of the common shares on the TSX is $0.16 or higher for a period of twenty consecutive trading days, the Company may, by
notice to the holder (supplemented by a news release of general dissemination) reduce the expiry date of the warrants to not
less than 30 days from the date of such notice.
The proceeds from both financings will be used for ongoing market development work, metallurgical studies and preliminary
engineering work on the Separation Rapids Lithium Project and for general working capital purposes.
This news release is not an offer of securities for sale in the United States. The securities have not been and will not be
registered under the US Securities Act of 1933, as amended (the "US Securities Act"), and may not be offered or sold in the
United States or to US persons (as defined in Regulation S under the US Securities Act) absent registration or an applicable
exemption from registration. All currency reported in this release is in Canadian dollars.
About The Lind Partners
The Lind Partners is a New York-based institutional fund management firm focused on small-and mid-cap companies publicly
traded in Canada, Australia and the UK across mining, oil & gas, biotech and technology. Lind employs a multi-strategy
investment approach: direct investments of new capital; participation in syndicated equity placements; IPO/pre-IPO investments;
and selective open market trades. Since 2009, the Lind team has completed over 75 direct investments totaling over $600
million in value.
About Avalon Advanced Materials Inc.
Avalon Advanced Materials Inc. is a Canadian mineral development company specializing in niche market metals and minerals
with growing demand in new technology. The Company has three advanced stage projects, all 100%-owned, providing investors
with exposure to lithium, tin and indium, as well as rare earth elements, tantalum, niobium and zirconium. Avalon is currently
focusing on its Separation Rapids Lithium Project, Kenora, ON, and its East Kemptville Tin-Indium Project, Yarmouth, NS. Social
responsibility and environmental stewardship are corporate cornerstones.
For questions and feedback, please e-mail the Company at
, or phone Don Bubar, President & CEO at 416-
364-4938.
This news release contains "forward-looking statements" within the meaning of the United States Private Securities Litigation
Reform Act of 1995 and applicable Canadian securities legislation.
Forward-looking statements include, but are not limited
to, statements
related to how the Company
plans to use the net proceeds from the
financing
s
,
Generally
, these forward-
looking statements can be identified by the use of forward-looking terminology such as "potential", "scheduled", "anticipates",
"continues", "expects" or "does not expect", "is expected", "scheduled", "targeted", "planned", or "believes", or variations of
such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be" or "will not
be" taken, reached or result, "will occur" or "be achieved". Forward-looking statements are subject to known and unknown
risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of
Avalon to be materially different from those expressed or implied by such forward-looking statements. Forward-looking
statements are based on assumptions management believes to be reasonable at the time such statements are made.
Although Avalon has attempted to identify important factors that could cause actual results to differ materially from those
contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or
intended. Factors that may cause actual results to differ materially from expected results described in forward-looking
statements include, but are not limited to market
conditions, and the possibility of cost overruns or unanticipated costs and
expenses
as well as those risk factors set out in the Company's current Annual Information Form, Management's Discussion
and Analysis and other disclosure documents available under the Company's profile at
www.SEDAR.com
. 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. Such forward-looking statements have been provided for the purpose of assisting
investors in understanding the Company's plans and objectives and may not be appropriate for other purposes. Accordingly,
readers should not place undue reliance on forward-looking statements. Avalon does not undertake to update any forward-
looking statements that are contained herein, except in accordance with applicable securities laws.