Lancaster Resources Announces Completion of Reverse Takeover Transaction with Lancaster Lithium
Lancaster Resources Announces Completion of Reverse Takeover Transaction withLancaster Lithium
Vancouver, British Columbia – June 9, 2023: Lancaster Resources Inc. (formerly, NeonMind BiosciencesInc.) (CSE:NEON) (OTC Pink: NBDBF) (FRA:6UF) (“Lancaster” or the “Company”) is pleased to announcethat the Company has closed the reverse takeover transaction with Lancaster Lithium Inc. (“LancasterLithium”) pursuant to the merger agreement signed on March 21, 2023 as announced on March 23,2023 (the “Transaction”).
On June 8, 2023, 1405306 B.C. Ltd. (“Subco”), a wholly-owned subsidiary of the Company, and LancasterLithium completed a statutory amalgamation under the provisions of the Business Corporations Act(British Columbia) (the “Amalgamation”) pursuant to which the former shareholders of LancasterLithium received common shares of the Company on 1:1 basis. In addition, the former warrantholdersand optionholders of Lancaster Lithium received warrants and options to purchase units or commonshares of the Company, as applicable.
The Company changed its name from “NeonMind Biosciences Inc.” to “Lancaster Resources Inc.”, and willoperate the current business of Lancaster Lithium going forward. The amalgamation was governed bythe terms of an amalgamation agreement between the Company, Subco and Lancaster Lithium datedJune 2, 2023. The company resulting from the Amalgamation, named “Lancaster Lithium Inc.” but aseparate entity from Lancaster Lithium, is now a wholly owned subsidiary of the Company. Further,management and the Board of Directors of the Company changed.
Pursuant to the Amalgamation, the Company issued the following securities in consideration for theCompany acquiring 100% of the issued and outstanding securities of Lancaster II:
● 39,476,861 common shares, the following shares of which are subject to restrictions:
o 21,921,861 Common Shares are subject to the Post Merger Restrictions; o 2,700,000 Common Shares are subject to the 3 Year Restrictions; ando 12,200,000 Common Shares subject to the Escrow Provisions.
● 1,619,668 broker warrants to purchase common shares at prices between $0.15 and $0.20,which are exercisable until March 31, 2026;
● 16,115,926 warrants to purchase common shares at prices between $0.30 and 0.50 per share,with expiration dates between March 31, 2026 and April 3, 2026; and
● 3,276,000 options governed by the stock option plan at exercise prices between $0.15 and $0.20per share.
Securities subject to 3 Year Restrictions according the the following schedule: 10% on listing date, 15% 6months after the listing date, 15% at 12 months after the listing date, 15% 18 months after the listing
date, 15% after 24 months after the listing date, 15% 30 months after the listing date, and the balance at36 months after the listing date; and 12,200,000 are subject to escrow provisions. Securities subject tothe Post Merger Restrictions will be released in 5 equal tranches over 120 days from the listing date.Securities subject to the Escrow Provisions
are
released
according
to
the
following
schedule:
10%
to
be
released
on
the
listing
date;
with
a
further
15%
to
be
released
on
each
six
month
anniversary
of
the
listing
date
over
a
period
of
36
months.
Immediately after completion of the Amalgamation, the Company issued a total of 1,972,592 units(including 60,000, with each unit consisting of one common share and one warrant to purchase anadditional common share at a price of $0.40 for a period of 36 months (the “Transaction Units”). Allcommon share and warrants issued as part of the Transaction Units are subject to a hold period of 4months and a day. Of the 1,912,592 Transaction Units issued:
● 750,000 Transaction Units were issued pursuant to a non-brokered private placement foraggregate proceeds of $150,000 (the “Private Placement”). In connection with the PrivatePlacement, the Company paid finder's fees of $12,000 and issued 60,000 broker’s warrants(“Broker’s Warrants”). Each Broker’s Warrant is exercisable into one common share of theCompany at a price of $0.20 for 36 months. The Company intends to use the net proceeds of theOffering to fund listing fees, marketing, and social media expenses.
● 268,650 Transaction Units were issued pursuant to conversion of $55,00 in bona fide debt of theCompany (the “Debt Conversion”). Of the 268,650 Transaction Units issued pursuant to the DebtConversion, 150,000 were issued to related parties of the Company; and
● 893,942 Transaction Units were issued pursuant to conversion of principal amount and intereston convertible debentures in the aggregate amount of $178,788 (the “Debenture Conversion”).Of the 893,942 Transaction Units issued under the Debenture Conversion, 248,000 were issuedpursuant to the conversion of $49,600 on principal amounts and 645,942 were issued pursuantto conversion of $129,188 in interest owing on convertible debentures.
The Transaction Units and Broker’s Warrants issued pursuant to the Private Placement, the DebtConversion, and the Debenture Conversion are subject to a statutory four-month and one day period inaccordance with applicable Canadian Securities Laws. Consequently, unless otherwise permitted byapplicable securities legislation, the holder of such securities must not trade the securities before suchdate. In addition, the Transaction Units issued to related parties of the Company are subject tocontractual restrictions on transfer over a period of three years.
The Company also granted an aggregate of 1,380,000 incentive stock options to directors andconsultants (the “Option Grant”). The options vest immediately and may be exercised at an exerciseprice of $0.20 per common share, for a period of 5 years from the date of issuance or earlier inaccordance with the Company’s incentive stock option plan. In accordance with regulatory requirements,any common shares issued pursuant to the exercise of such options will be subject to a resale restrictionfor a period of four months and one day from the date of the grant.
As as a result of the Amalgamation and issuance of the Transaction Units pursuant to the PrivatePlacement, Debt Conversion, and Debenture Conversion, and the Option Grant, the Company now hasthe following issued and outstanding securities:
● 42,512,872 common shares;
● 19,795,704 warrants to purchase common shares at exercise prices ranging from $0.15 to $16.80per share, expiring between November 2023 and May 2026;
● 4,703,209 options to purchase common shares at exercise prices ranging from $0.15 to $12.00per share; and
● convertible debentures convertible into 79,436 shares and 79,436 warrants.
For details regarding certain elements of the Transaction, including the pre-closing completion of thePrivate Placement, the Debt Conversion, the Debenture Conversion, or the Option Grant by theCompany, and the composition of the Company’s board of directors post-Amalgamation, please refer tothe Company’s listing statement dated June 9, 2023.
The Transaction constituted a fundamental change in accordance with the policies of the CanadianSecurities Exchange. Trading in the common shares of the Company is currently halted, but the Companyhas received conditional approval to re-list the shares following the completion of the Transaction andanticipates receiving final approval shortly.
Appointment of New Directors
The Company wishes to announce the resignation of Cole Drezdoff as a director of the Companyeffective as of today's date. Heather Remillard and Daniel Kang were appointed as new directors of theCompany. Effective today, the directors who hold office until the next annual general meeting of theshareholders of the Company are Penny White, Rob Tessarolo, Heather Williamson, and Daniel Kang.
Appointment of New Officers
The Company wishes to announce the resignation of Rob Tessarolo as Chief Executive Officer andPresident of the Company effective as of today’s date. Effective today, Penny White has been appointedChief Executive Officer and President, and Heather Williamson has been appointed VP, CorporateFinance and remains as Corporate Secretary.
About Lancaster Resources Inc.
Lancaster Resources is engaged in exploring energy transition metals, particularly lithium, to takeadvantage of the global shift towards decarbonization and electrification. Its goal is to identify, acquire,explore, and develop high-quality mineral-rich properties, integrating sustainable energy sources andinnovative technologies for climate-positive resource production. The Company holds exclusive rights toacquire a 100% interest in the Alkali Flat lithium brine project situated in Lordsburg, New Mexico, USA.
The disclosure of technical information in this news release has been prepared in accordance withCanadian regulatory requirements as set out in National Instrument 43-101 - Standards of Disclosure forMineral Projects and reviewed and approved by Gary Lohman, B.Sc., P. Geo., who acts as the Company'sQualified Person, and is not independent of the Company.
Penny White, President & Chief Executive Officer, Lancaster Resources [email protected]: 604 923 6100
The Canadian Securities Exchange has not reviewed, approved nor disapproved the contents of this newsrelease.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements contained in this press release constitute forward-looking information. Thesestatements relate to future events, including the completion of the Transaction, or Lancaster’s futureperformance. The use of any of the words “could”, “expect”, “believe”, “will”, “projected”,”estimated” andsimilar expressions and statements relating to matters that are not historical facts are intended toidentify forward-looking information and are based on Lancaster’s current belief or assumptions as to theoutcome and timing of such future events. Actual future results may differ materially. In particular, theability of Lancaster to retain key personnel, and raise capital constitute forward-looking information.Actual results and developments may differ materially from those contemplated by forward-lookinginformation.
Readers are cautioned not to place undue reliance on forward-looking information. The statements madein this press release are made as of the date hereof. Lancaster disclaims any intention or obligation topublicly update or revise any forward-looking information, whether as a result of new information, futureevents or otherwise, except as may be expressly required by applicable securities laws.