Desert Lion Energy Corp. Closes $5.6 Million Private Placement of Subscription Receipts
December 13, 2017
TORONTO, Canada, December 13, 2017 – Desert Lion Energy Corp. (“Desert Lion” or the “Company”) is pleased to announce that it has completed a brokered private placement of subscription receipts of the Company (“Subscription Receipts”) led by Haywood Securities Inc., on behalf of a syndicate of agents including Eight Capital (collectively, the “Agents”) to raise gross proceeds of $5,597,242 (the “Brokered Offering”). A non-brokered offering of Subscription Receipts is currently ongoing and is expected to close imminently.
The Offering was completed in connection with the business combination (the “Transaction”) previously announced by Desert Lion and Camex Energy Corp. (“Camex”) on October 16, 2017, pursuant to which 2590945 Ontario Inc., a wholly-owned subsidiary of Camex, and Desert Lion will amalgamate (the “Amalgamation”) to form a newly amalgamated company (“Amalco”), and upon such amalgamation, the former shareholders of Desert Lion will receive one post-consolidation common shares of Camex (a “New Camex Share”) for each common share of Desert Lion (a “Desert Lion Share”) held and Amalco will become a wholly-owned subsidiary of Camex.
Pursuant to the Offering, the Company issued an aggregate of 3,075,408 Subscription Receipts at a price of $1.82 per Subscription Receipt for gross proceeds of $5,597,242. The Subscription Receipts were issued pursuant to a subscription receipt agreement (the “Subscription Receipt Agreement”) entered into among Desert Lion, Haywood and Computershare Trust Company of Canada (the “Escrow Agent”). Upon satisfaction of certain Escrow Release Conditions (as described below), each Subscription Receipt will be automatically converted without any further consideration or action by the holder thereof into one Desert Lion Share and one-quarter of one common share purchase warrant of Desert Lion (each whole warrant, a “SR Warrant”). Each SR Warrant will be exercisable to acquire one Desert Lion Share at a price of $2.28 for a period of 24 months following closing of the Offering.
The gross proceeds of the Offering, less 50% of the Agents’ commission and all of the Agents’ expenses incurred in connection with the Offering, together with all interest and other income earned thereon (the “Escrowed Funds”) will be held in escrow by the Escrow Agent pending satisfaction of the Escrow Release Conditions. Provided that the Escrow Release Conditions are satisfied by April 12, 2018 (the “Escrow Release Deadline”), the Escrowed Funds will be released from escrow by the Escrow Agent to: (a) the Agents and finders, as applicable, in an amount equal to the remaining cash commission payable thereto, together with any pro rata interest and other income earned thereon, and any additional expenses incurred by the Agents and finders, respectively, in connection with the Offering; and (b) Desert Lion, in an amount equal to the Escrowed Funds, less the foregoing deductions and together with any interest and other income earned thereon.
If the Escrow Release Conditions have not been satisfied on or prior to the Escrow Release Deadline, the Escrowed Funds shall be returned to the holders of the Subscription Receipts on a pro rata basis and the Subscription Receipts shall thereafter be cancelled. Desert Lion will be responsible and liable to the holders of the Subscription Receipts for any shortfall between the aggregate Subscription Receipt price paid by the original purchasers of the Subscription Receipts and the amount of the Escrowed Funds.
The escrow release conditions (“Escrow Release Conditions”) will be satisfied by delivery of a notice from the Chief Executive Officer or Chief Financial Officer of the Company (or such other officers as may be acceptable to the Agents, acting reasonably) to the Escrow Agent on or before the Escrow Release Deadline confirming satisfaction or waiver of the following conditions:
- all conditions precedent to the closing of the Transaction as included in the definitive agreement in respect of the Transaction have been satisfied or waived, including, inter alia, the filing and acceptance by the TSXV of the disclosure document, to the satisfaction of the Agents, acting reasonably;
- the receipt of all required shareholder and regulatory approvals, as applicable, for the Transaction and the Offering, to the satisfaction of the Agents;
- receipt of conditional approval by the TSXV for the listing of the New Camex Shares, including any such New Camex Shares issuable upon the exchange or exercise of, as applicable, the securities of Desert Lion issuable pursuant to the Offering;
- Desert Lion shall have not committed any breach of the agency agreement entered into between Desert Lion, Camex and the Agents, that has not been waived by the Agents or cured within five days of Desert Lion’s receipt of written notice from the Agents specifying in reasonable detail the nature of such breach; and
- the agency agreement entered into between Desert Lion, Camex and the Agents in connection with the Offering shall not have been terminated.
Immediately prior to the effective time of the Transaction, upon satisfaction of the Escrow Release Conditions, the Subscription Receipts shall be automatically converted into Desert Lion Shares and SR Warrants, in accordance with the terms of the Subscription Receipt Agreement. Pursuant to the Amalgamation, holders of Desert Lion Shares will receive one New Camex Share for each one Desert Lion Share held. In addition, each convertible security of Desert Lion other than stock options (including for greater certainty the Unit Warrants, SR Warrants, Unit Compensation Options and SR Compensation Options) will remain outstanding and will be convertible into or exercisable for, as applicable, the equivalent number of New Camex Shares on the same terms.
The net proceeds from the Offering will be used to advance the Company’s lithium project located in Namibia and for other general corporate purposes.
About Desert Lion Energy
Desert Lion Energy Corp. is a lithium developer and producer focused on building Namibia’s first large-scale lithium mine and is located 30 km from Karibib and approximately 210 km from the nation’s capital of Windhoek. Desert Lion’s lithium project is located within a 301 km2 prospective land package, with known lithium bearing pegmatitic mineralization and is currently in Phase 1 of its production plan, processing ore and exporting lithium concentrate from stockpiles. The project site is accessible year-round by road and has access to power, water, rail, port, airport and communication infrastructure. Desert Lion has entered into an agreement with Camex Energy Corp. (TSXV: CHE.H) to complete an amalgamation and reserve take-over of Camex Energy Corp. Desert Lion Energy Corp. expects to be listed on the Toronto Stock Exchange (Venture) in early 2018.
This news release contains “forward-looking information” within the meaning of applicable securities laws. Generally, any statements that are not historical facts may contain forward-looking information, and forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget” “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or indicates that certain actions, events or results “may”, “could”, “would”, “might” or “will be” taken, “occur” or “be achieved.” Forward-looking information includes, but is not limited to: statements and expectations regarding the completion of the non-brokered offering, the intended use of proceeds from the Offering and the proposed Transaction. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to: risks related to completion of the proposed Transaction, the Company’s ability to secure the necessary shareholder and regulatory approvals required to complete the Transaction, the Company’s ability to complete the non-brokered private placement, the total amount of funds raised pursuant to the Offering and the non-brokered private placement, the ability to raise funds to advance the Company’s lithium project located in Namibia. Although the Company has attempted to identify important factors that may cause results not to be as anticipated, estimated or intended, there can be no assurance that such forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. Forward-looking information is made as of the date of this new release and the Company does not undertake to update or revise any forward-looking information this is included herein, except in accordance with applicable securities laws.
For more information, please contact:
Desert Lion Energy Inc.
Tim Johnston, President & CEO
Salisha Ilyas, VP, Investor Relations
Tel: (416) 309-2953