Mr. Peter Dickie reports
EARLY WARNING REPORT ISSUED PURSUANT TO NATIONAL INSTRUMENT 62-103-ACQUISITION OF SPECIAL WARRANTS OF NIOCORP DEVELOPMENTS LTD.
On Nov. 10, 2014, Mark Smith subscribed for, purchased, and acquired ownership and control of 4,132,232 special warrants of Niocorp Developments Ltd. at a price of 55 cents per special warrant pursuant to the closing of the private placement by the company of an aggregate 19,245,813 special warrants at 55 cents per special warrant for total gross proceeds of $10,585,197.15. Each special warrant will entitle the holder to receive upon exercise or deemed exercise, for no additional consideration, one unit of the company. Each unit comprises one common share of the company and one transferable common share purchase warrant. Each warrant will entitle Mr. Smith to acquire one additional common share at a price of 65 cents per warrant share until Nov. 10, 2016. Accordingly, upon conversion of the special warrants, 4,132,232 shares and 4,132,232 warrants will be issued to Mr. Smith. On exercise by Mr. Smith of all warrants issued pursuant to the exercise of his special warrants, a further 4,132,232 warrant shares will be issued to Mr. Smith.
The company will, as soon as reasonably practicable, file a final short form prospectus pursuant to National Policy 11-202 and Multilateral Instrument 11-102, and obtain a receipt from the securities regulators in such jurisdictions in Canada in which a holder of special warrants is resident. In the event that the liquidity event does not occur within 75 days of the closing date of the private placement, each unexercised special warrant will thereafter entitle the holder to receive, at no additional consideration, 1.1 units (instead of one unit). Unless qualified by a final short form prospectus, the securities issued under the private placement are subject to a four-month hold period that expires on March 11, 2015, in addition to any resale restrictions imposed on special warrants subscribed for by United States residents under United States securities laws.
All unexercised special warrants will be deemed to be exercised on the earlier of March 11, 2015, and the third business day after the occurrence of a liquidity event.
Having not yet exercised any of the special warrants acquired by Mr. Smith pursuant to the private placement, he now owns and controls 11,289,483 shares, which represent approximately 9.11 per cent of the current total issued and outstanding shares on a non-diluted basis. In addition, Mr. Smith holds 2.5 million incentive stock options, each entitling him to acquire one share.
Assuming exercise of all special warrants issued under the private placement, including those issued to Mr. Smith, Mr. Smith will own and control 15,421,715 shares of the company or approximately 12.04 per cent of the then 143,158,529 shares which would be issued and outstanding.
On exercise of the warrants that will be issued to Mr. Smith on exercise of his special warrants, but not assuming the exercise of all warrants issued pursuant to the private placement, Mr. Smith would own and control 19,553,947 shares of the company or approximately 14.79 per cent of the then 132,177,180 shares which would be issued and outstanding. Assuming exercise of all warrants issued under the private placement, including those issued to Mr. Smith, Mr. Smith would own and control 19,553,947 shares of the company or approximately 12.04 per cent of the then 162,404,342 shares which would be issued and outstanding.
Mr. Smith has no joint actors with respect to his ownership of securities of the company. Mr. Smith acquired the special warrants for investment purposes. Mr. Smith may increase or decrease his ownership interest in securities of the company depending on, among other factors, market conditions. Mr. Smith has no present intention to change his holdings of securities of the company. The special warrants were issued pursuant to terms of the company's U.S. purchaser subscription agreement under the private placement. The subscription agreement has terms customary for a transaction of this nature. The gross aggregate subscription amount of Mr. Smith's subscription to the private placement was $2,272,727.60.
Mr. Smith acquired his special warrants pursuant to the "accredited investor" exemption found in Section 2.3 of National Instrument 45-106, prospectus and registration exemptions.
We seek Safe Harbor.
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