Tactical Resources Corp. Bolsters Financial Position with Debenture Offering
Tuesday, Jan 21, 2025 9:37 pm ET
3min read Tactical Resources Corp. (TSXV: RARE | OTC: USREF), a Vancouver-based mineral exploration and development company focused on rare earth elements (REEs), has announced the successful closing of a non-brokered private placement of unsecured convertible debentures. The offering raised $500,000, providing the company with additional capital to fund its operations and growth initiatives. This strategic move strengthens Tactical Resources' financial position and enhances its future growth prospects.
The debenture offering consists of unsecured convertible debentures with a maturity date of January 21, 2027. These debentures may be converted into units of the Company at any time from the date of issuance until the Maturity Date, at a conversion price of $0.20 per Unit. Each Unit is comprised of one common share in the capital of the Company (a "Share") and one Share purchase warrant (a "Warrant"), with each Warrant exercisable into an additional Share at the price of $0.20 for a three-year period beginning on the date of conversion.
The Debentures bear interest at the rate of 10% per annum, computed on the basis of a 360-day year comprised of twelve 30-day months, with all interest payable on the Maturity Date. Any accrued and unpaid Interest may, in the Company's sole discretion, be paid in cash or in Units at a conversion price equal to the last closing market price of the Shares on the TSX Venture Exchange (the "TSX-V") immediately prior to such conversion date, subject to the policies of the TSX-V.
The Debentures and any Warrants issued upon conversion of the Debentures are subject to ten percent and twenty percent blocker provisions that restrict the conversion of the Debentures and the exercise of any underlying Warrants, respectively, in the event that such conversion or exercise would result in the applicable securityholder holding ten percent or more of the issued and outstanding Shares at such time, in the case of the ten percent blocker provision, or 20.0% or more of the issued and outstanding Shares at such time, in the case of the 20.0% blocker provision.
The Debentures and the Warrants included in the Units issuable upon conversion of the Debentures will not be listed or posted for trading on any stock exchange. All securities issued in connection with the Private Placement will be subject to a statutory resale restriction for four months plus one day from the closing date of the Private Placement.
In connection with the closing of the Private Placement, the Company paid a cash finder's fee of $4,564 to a certain arm's length finder.
The Company intends to use the proceeds from the Private Placement for general working capital purposes and for transaction expenses with respect to its previously announced business combination transaction (the "Proposed Business Combination") with Plum Acquisition Corp. III ("Plum"). Two insiders of the Company participated in the Private Placement and acquired Debentures with a total aggregate principal amount of $15,000. As such, the closing of the Private Placement may constitute a related party transaction under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101") but is otherwise exempt from the formal valuation and minority approval requirements of MI 61-101 by virtue of Sections 5.5(a) and 5.7(1)(a) of MI 61-101, as neither the fair market value of any securities issued to, nor the consideration paid by, such person exceeds 25% of the Company's market capitalization.
The Debentures and the securities issuable upon conversion thereof have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws and may not be offered or sold within the United States or to, or for the account or benefit of, a U.S. person (as defined in Regulation S under the U.S. Securities Act) unless registered under the U.S. Securities Act and applicable state securities laws, or an exemption from such registration is available. This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities referred to herein.
Tactical Resources' strategic move to close the debenture offering demonstrates its commitment to strengthening its financial position and enhancing its future growth prospects. The additional capital raised will support the Company's operations at the Peak Project and future development initiatives, further positioning it to support U.S. critical mineral needs amid China's export restrictions. As the demand for REEs continues to grow, Tactical Resources is well-positioned to capitalize on market opportunities and create value for its shareholders.
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