Kodiak Copper Corp. (the “Company” or “Kodiak”) (TSX-V: KDK, OTCQB: KDKCF, Frankfurt: 5DD1) announces that it intends to complete a non-brokered private placement financing for gross proceeds of up to $4 million (the “Offering”). The Offering will consist of the issuance of a combination of the following securities:
- charity flow-through units (the “Charity FT Units”) that will be issued as part of a charity arrangement, each of which Charity FT Unit will consist of one common share of the Company (a “Common Share”) and one-half of one non-transferable common share purchase warrant (each whole warrant, a “Charity FT Warrant”), both of which will qualify as “flow-through shares” (within the meaning of subsection 66(15) of the Income Tax Act (Canada) (the “Tax Act”)), at a price of $0.79 per Charity FT Unit;
- common share units (the “HD Units”), each of which HD Unit will consist of one non-flow-through Common Share and one-half of one non-transferable, non-flow-through common share purchase warrant (each whole warrant, a “Warrant”), at a price of $0.47 per HD Unit; and
- flow-through shares (the “FT Shares”), at a price of $0.54 per FT Share, each of which will qualify as “flow-through shares” (within the meaning of subsection 66(15) of the Tax Act).
Each Charity FT Warrant and Warrant issuable under the Offering will entitle the holder to purchase one non-flow-through Common Share at an exercise price of $0.65 for a period of 24 months following the closing date. Further, in the event that, after the statutory hold period of four months and a day from the closing date, the Company’s Common Share price closes at or above $0.95 on the TSX Venture Exchange (“TSXV”) for 20 consecutive trading days, the Company may, within 15 days of the occurrence of such event, deliver a notice to the holders of Charity FT Warrants and the Warrants accelerating the expiry date of the Charity FT Warrants and the Warrants to the date that is 30 days following such notice, and any unexercised Charity FT Warrants and Warrants after such period shall automatically expire.
The net proceeds from the sale of the HD Units will be used for working capital and general corporate purposes. The Company will use an amount equal to the gross proceeds received from the sale of the Charity FT Units and FT Shares, pursuant to the provisions in the Tax Act, to incur eligible “Canadian exploration expenses” that qualify as “flow-through critical mineral mining expenditures” as both terms are defined in the Tax Act (the “Qualifying Expenditures”) related to the Company’s projects in British Columbia, on or before December 31, 2025, and to renounce all the Qualifying Expenditures in favour of the subscribers of the Charity FT Units and FT Shares effective December 31, 2024. If the Qualifying Expenditures are reduced by the Canada Revenue Agency, the Company will indemnify each Charity FT Unit and FT Share subscriber for any additional taxes payable by such subscriber as a result of the Company’s failure to renounce the Qualifying Expenditures as agreed.
The Offering is expected to close on or about June 21, 2024, or on any other date or dates as the Company may determine, and is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory and other approvals including the acceptance of the TSXV. The securities issued pursuant to the Offering, and the underlying securities, will be subject to a hold period of four months and one day from the date of closing.
Certain insiders of the Company are anticipated to participate in the Offering, and the participation of insiders will be considered a related party transaction subject to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Company intends to rely on exemptions from the formal valuation and minority shareholder approval requirements provided under subsections 5.5(a) and 5.7(1)(a) of MI 61-101 on the basis that participation in the Offering by insiders will not exceed 25% of the Company’s market capitalization.
This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities described herein have not been and will not be registered under the United States Securities Act of 1933, as amended, or any U.S. state securities laws, and may not be offered or sold in the United States absent registration or available exemptions from such registration requirements. This press release does not constitute an offer to acquire securities in any jurisdiction.
