Caprock's Strategic Move: Issuing Shares for Debt Settlement

Caprock Mining Corp. (CSE:CAPR) has announced a strategic move to settle an aggregate of $100,000 of indebtedness by issuing 2,000,000 common shares at a deemed price of $0.05 per share to Windmark Financial Ltd. This shares for debt transaction is a proactive step by the company to improve its financial health and liquidity, while also addressing its debt obligations.

The issuance of shares for debt settlement is a common practice in the capital markets, allowing companies to convert debt into equity, thereby reducing their immediate cash obligations. This transaction enables Caprock to free up capital that can be reinvested into its exploration projects and general working capital needs. By doing so, Caprock can focus on its core operations and growth initiatives, rather than being burdened by short-term cash constraints.

The transaction is subject to prospectus exemptions available pursuant to Canadian securities law and will be subject to a four-month hold period, which will expire on the date that is four months and a day following the issuance of the shares. The issuance of shares is considered a related party transaction under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (MI 61-101), but the company is exempt from the formal valuation and minority approval requirements due to the size of the transaction and the fact that Caprock is not listed on a specified market.

The issuance of shares for debt settlement is a strategic move by Caprock, as it allows the company to address its debt obligations while also improving its liquidity and financial health. By converting debt into equity, Caprock can focus on its core operations and growth initiatives, ultimately benefiting both the company and its shareholders in the long run.