Labrador Technologies Inc. Provides Update ON Proposed Oil and Gas Property Acquisition, Concurrent Financings, Debt Extending Agreement, Credit Facility, Filing Statement and NAME Change
LABRADOR TECHNOLOGIES INC. PROVIDES UPDATE ON PROPOSED OIL AND GAS PROPERTY
ACQUISITION, CONCURRENT FINANCINGS, DEBT EXTENDING AGREEMENT, CREDIT FACILITY, FILING
STATEMENT AND NAME CHANGE
Calgary, Alberta, November 2, 2022: Labrador Technologies Inc. (the “Corporation” or “Labrador”) (TSXV
– “LTX”) is pleased to provide an update pertaining to its previously announced proposed arm's length
acquisition of oil and gas interests in the Atlee Buffalo area of Alberta (the “Acquisition”). The Acquisition
will be accompanied by concurrent financings (the “Concurrent Financings”), a debt extending agreement
which will extend the repayment date of certain of the Corporation’s trade payables and outstanding
loans (the “Debt Extending Agreement”) and the entering into of a credit facility (the “ Credit Facility”).
Taken together, the Acquisition, the Concurrent Financings, the Debt Extending Agreement and the Credit
Facility are intended to complete a change of business of the Corporation into the oil and gas exploration
and production business and are referred to herein as the “ COB Transactions ”(please refer to the
Corporation’s press releases dated April 5, 2022 and April 6, 2022).
Certain of the terms of the COB Transactions have been modified with such new terms incorporated
herein.
The Acquisition
The Acquisition will be completed pursuant to a purchase and sale agreement between Labrador and
Kasten Energy Inc. (the “ Vendor”) executed by Kasten and Labrador on April 6, 2022 , includin g the
schedules thereto, as amended and restated on September 7, 2022 (the “PSA”). The PSA contains the
following provisions:
1) the effective date of the Acquisition will be March 31, 2022;
2) the purchase price will be $782,000 (the “Purchase Price”), payable through;
a) a deposit of $25,000, which was paid by the Corporation to the Vendor on April 6, 2022 (the
“Initial Deposit”);
b) a cash payment in the amount of $175,000 at closing (the “Second Cash Payment”);
c) the issuance by Labrador to the Vendor of a non-interest bearing convertible debenture in the
amount of $350,000 which will mature two (2) years from the date of issue (the “Convertible
Debenture”). The Convertible D ebenture may be converted into common shares of the
Corporation at the option of either the holder or the Corporation for a period of 2 years from the
date of issue. The conversion price during the first year will be $0.05 per common share and will
be $0.10 per common share for the second year. The terms of the Convertible Debenture will
prohibit any conversion for the first six months following its issuance and will prohibit conversion
if it will result in the creation of a new Control Person (as defined in the policies of the TSX Venture
Exchange) of the Corporation without first having obtained the prior acceptance of the TSX
Venture Exchange (the "TSXV") and the approval of the shareholders of the Corporation; and
d) the issuance by Labrador to the Vendor of a promissory note (“Promissory Note ”) in the
amount of $232,000. The Promissory Note will be repayable two (2) years after the date of issue,
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shall bear interest at a rate of seven percent (7%) per annum and shall be secured by a first charge
general security agreement.
Concurrent Financings
In order that the Corp oration meet the minimum capital requirement of the TSXV at closing of the COB
Transactions, including having the funds required to complete certain development operations on the
property making up the Acquisition, f unding of ongoing general and administrative costs and having a
minimum of $100,000 of unallocated working capital, the Corporation must complete a private placement
of common shares at a price of $0.05 per common shares for gross proceeds of a minimum and maximum
of $200,000 (the “PP”) and also close a private placement of “flow-through” common shares at a price of
$0.05 per flow-through common share for gross proceeds of a minimum of $360,000 and a maximum of
$5,000,000 (the “ Flow-Through PP”). The PP an d the Flow -Through PP will be non -brokered, and the
Corporation may pay finders fees or commissions of up to seven percent (7%) in respect of subscriptions
brought by eligible finders or brokers. Closing of the PP and the Flow-Through PP for minimum gross
proceeds of $200,000 and $240,000 , respectively, are also conditions for closing of the Acquisition
pursuant to the PSA.
Credit Facility
The Corporation entered into the arm’s length Credit Facility with KSS Capital Partners Inc. (the “Lender”)
in the amount of $500,000 on April 4, 2022. Advances have been made under the Credit Facilit y in the
amount of $50,000 with such funds having been used to fund certain ongoing payables, to fund the costs
of preparing the Technical Report, to pay the I nitial Deposit and to fund the costs of preparing the filing
statement required by the TSXV for the COB Transactions (the "Filing Statement"). On October 25, 2022,
the Credit Facility was amended to increase the facility from $500,000 to $650,000. Further advances
under the Credit Facility are anticipated to be made to fund the Second Cash Payment and to cover certain
additional costs associated with audit and legal fees associated with the Filing Statement and related
materials including the review of the Corporation’s regular financial statements and the preparation and
review of proforma financial statements associated with the COB Transactions. Advances made pursuant
to the Credit Facility will be evidenced by promissory notes issued by the Corporation and will be secured
by a general security agreement which is subordinated to the Promissory Note being issued to the Vendor
in relation to the Acquisition.
Debt Extending Agreement
The Corporation has entered into the arm’s length Debt Extending Agreement dated September 26, 2022
whereby the terms of repayment of certain existing trade payables of, and loans payable by, the
Corporation totaling $287,137.88 have been extended such that they will be repayable two (2) years from
the date of closing of the COB Transactions. The amounts due under the Debt Extending Agreement will
bear interest at a rate of seven (7) percent per annum.
Technical Report
The Corporation commissioned, and received, an evaluation of the property that is the subject of the
Acquisition (the “ Property”). The evaluation was performed by Boury and Associates (the “ Boury
Report”) and is compliant with National Instrument 51 -101. The Boury Report for med the basis for
negotiating the purchase price of $782,000. T he Boury Report was dated June 14, 2022 and includes a
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price forecast effective as at March 31, 2022 . A copy of the Boury Report will be available for review
under the Corporation’s profile on Sedar at www.sedar.com. The Property consists of a sixty percent
(60%) working interest in one section of land in the Atlee Buffalo area of Alberta upon which seven (7)
wells are situated. One of those wells (the “Reactivation Well”) was shut in during November 2006 after
having produced approximately 69,900 bbls of oil with indicated productive capacity of approximately 90
bbls/day (gross) of oil during the three months preceding the well having been shut in. All wells associated
with the Property have remained shut in since late 2007. The Boury Report has identified op portunities
on the Property that include restoring the Reactivation Well to production and the drilling of two (2)
horizonal wel ls on the Property. The Property also includes a fifty percent (50%) working interest in
another adjacent section of land upon one (1) well is situated. The Boury Report did not evaluate those
additional lands or the well situated thereon.
Filing Statement
The Corporation will prepare the Filing Statement pursuant to the policies of the TSXV, to provide
particulars regarding the Corporation, the Acquisition and the Corporation after completion of the COB
Transactions. A copy of the Filing Statement will be available for review under the Corporation’s profile
on Sedar at www.sedar.com.
Name Change
At the special meeting of shareholders of the Corporation held on January 31, 2022, the shareholders
passed a resolution approving a change of the name of the Corporation to be more reflective of its
business activities. In connection with closing of the COB Transactions, the Corporation will enact that
resolution by amending its articles to change the name of the Corporation to Labrador Resources Inc.
Trading Halt
Trading in the common shares of the Cor poration has been halted and will remain halted pending final
approval of the TSXV after closing of the COB Transactions. There can be no assurance that closing of the
COB Transactions will occur such that trading in the common shares of the Corporation will resume.
Shareholder Approval
The Corporation will not be obtaining shareholder approval of the COB Transactions pursuant to the
policies of the TSXV as the COB Transactions is not a Related Party Transaction (as defined in the policies
of the TSXV), the Corporation is without active operations, the Corporation is not and is not anticipated
to be subject to a cease trade order and is anticip ated to not otherwise be suspended from trading on
completion of the COB Transactions, and shareholder approval of the COB Transactions is not required
under applicable corporate laws and is not required under applicable securities laws.
Principals and Insiders
The following sets out the names and backgrounds of all persons who will constitute principals or insiders
of the Corporation following closing of the COB Transactions.
Kaan Camlioglu – Chief Executive Officer, Corporate Secretary and Director
From 1996 to 2019, Mr. Camlioglu has held increasingly senior financial roles with a variety of public and
private entities, including nearly a decade with the TSXV. Since January 2019, Mr. Camlioglu has been the
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Interim CEO of Labrador. Mr. Camlioglu is a Chart ered Financial Analyst and Chartered Professional
Accountant (CPA, CMA). He holds a Bachelor of Arts Degree (Economics) from the University of Calgary.
Jeffrey A. Howe – Chief Financial Officer and Director
Mr. Howe has been a director of the Corporation since 2003 and was CFO from 2006 to 2013 and
subsequently appointed as Interim CFO in 2015. Mr. Howe was previously the Director of Finance for Pure
Metal Galvanizing (a division of Valmont Industries). Forme rly a principal with an accounting firm in the
Technology, Communication and Entertainment practice, he has over 20 years of senior management,
technical, and financial experience.
George A. Wilson – Director
Mr. Wilson is a retired Senior Partner who practiced corporate law at an international law firm in Toronto.
Formerly, Mr. Wilson was a lecturer at Osgoode Hall Law School and the Managing Partner of a Toronto-
based law firm. Mr. Wilson has over 50 years of business experience in corporate law and sits on numerous
private company boards.
Jeffrey M. Graw – Proposed Director
Mr. Graw has over 30 years' experience as a business owner in the Alberta resource sector. Currently he
is the President and a partner of a Calgary -based company specializing in seism ic data acquisition and
processing.
Cautionary Note
Completion of the COB Transactions is subject to a number of conditions, including but not limited to,
TSXV acceptance and if applicable, disinterested shareholder approval. Where applicable, the COB
Transactions cannot close until the required shareholder approval is obtained. There can be no assurance
that the COB Transactions will be completed as proposed or at all. Investors are cautioned that, except as
disclosed in the Filing Statement to be prepared in connection with the COB Transactions, any information
released or received with respect to the COB Transactions may not be accurate or complete and should
not be relied upon. Trading in the securities of the Corporation should be considered highly spe culative.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed COB Transactions
and has neither approved nor disapproved the contents of this news release. In addition to the above, the
proposed COB Transactions are subject to a number of further conditions, including but not limited to: (a)
closing conditions customary to tra nsactions of the nature of the p roposed COB Transactions; (b)
approvals of regulatory bodies having juris diction in connection with the p roposed COB Transactions
including the TSXV.
There can be no assurance that the proposed COB Transactions will be completed as proposed or at all.
Forward Looking Statements
This news release contains statements and information that, to the extent that they are not historical fact,
may constitute "forward-looking information" within the meaning of applicable securities legislation.
Forward-looking information is typically, but not always, identified by the use of words such as " will",
"intended", and similar words, i ncluding negatives thereof, or other similar expressions concerning
matters that are not historical facts. Forward-looking information in this news release includes, but is not
limited to, statements regarding: the COB Transactions , including the proposed Acquisition and
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Concurrent Financings; the Credit Facility; the completion and filing of the Filing Statement; the proposed
name change of the Company; and the proposed business and assets of Labrador.
Such forward -looking information is based on various assumptions and factors that may prove to be
incorrect, including, but not limited to, factors and assumptions with respect to: the completion of the
COB Transactions and the timing thereof; and the ability of the Company to successfully implement its
strategic plans and initiatives and whether such strategic plans and initiatives will yield the expected
benefits; the satisfactory fulfilment of all terms and conditions contained in the PSA; the receipt of all
required approvals, including TSXV approval; and market acceptance of the COB Transactions. Although
the Company believes that the assumptions and factors on which such forward -looking information is
based are reasonable, undue reliance should not be placed on the forward -looking information because
the Company can give no assurance that it will prove to be correct or that any of the events anticipated
by such forward -looking information will transpire or occur, or if any of them do so, what benefits the
Company will derive therefrom.
Actual results could differ materially from those currently anticipated due to a number of factors and risks
including, but not limited to: conditions in the oil and gas industry; the risk that the COB Transactions will
not be completed as anticipated or at all; the ability of management to execute its business strategy,
objectives and plans; and the impact of general economic conditions. The forward -looking information
included in thi s news release is made as of the date of this news release and the Company does not
undertake an obligation to publicly update such forward-looking information to reflect new information,
subsequent events or otherwise, except as required by applicable law.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this
release.
Not for Release in the United States of America
For further information, please contact:
Kaan Camlioglu
CEO, Labrador Technologies Inc.
Phone: (403) 818 1091
Email: [email protected]