Mr. George Lian reports
ARCLAND ANNOUNCES RESULTS OF SHAREHOLDERS MEETING; EXPIRY OF LETTER OF INTENT FOR SW TECH CORP. ACQUISITION; CONSOLIDATION OF COMMON SHARES; FINANCING OF UP TO $500,000 AND DEBT SETTLEMENT OF UP TO $100,000; AND APPOINTMENT OF EDWARD POSEY AS THE NEW CEO AND DIRECTOR
Arcland Resources Inc. has released the results of its annual general and special meeting of shareholders, held on May 14, 2021. A total of 7,583,134 common shares of the company were voted, representing 58.65 per cent of Arcland's issued and outstanding common shares. At the meeting, shareholders overwhelmingly voted in favour of all proposed resolutions that consisted of the following:
- Number of directors set at five;
Election of George Lian, Wendy Kaip, Robert Ferguson, David Mark and Xiufen (Jane) Liu as directors;
Appointment of DeVisser Gray LLP as auditor of the corporation for the ensuing year and authorizing the directors to fix its remuneration;
Adoption of the news articles of the company;
Approval of the stock option plan.
Expiry of letter of intent for SW Tech Corp. acquisition
The non-binding letter of intent dated Nov. 25, 2020, with SW Tech has now expired and is terminated pursuant to its terms as the parties were unable to enter into a definitive agreement before the deadline for doing so. As previously announced in Arcland's press release dated Nov. 26, 2020, Arcland and SW Tech intended to complete a business combination, which will now no longer be proceeding. Consequently, Arcland is evaluating a number of potential opportunities to bring value to its shareholders and is actively pursuing alternative acquisition targets.
The company will be consolidating all of its issued and outstanding common shares on the basis of one for four, with each four preconsolidation common shares being consolidated into postconsolidation common share. The proposed consolidation has been approved by the board of directors.
The proposed consolidation would result in the number of issued and outstanding common shares being reduced from the current outstanding 12,929,335 to approximately 3,232,333 common shares. The company also has 500,000 outstanding incentive stock options, equal to 125,000 options on a postconsolidation basis. The exercise price of the options will be proportionately adjusted to reflect the consolidation in accordance with the terms thereof.
Each shareholder's percentage ownership in the company and proportional voting power remain unchanged after the consolidation, except for minor changes and adjustments resulting from the treatment of any resulting fractional shares. No fractional shares will be issued as a result of the consolidation. Any fractional shares resulting from the consolidation will be rounded down to the next whole common share, and no cash consideration will be paid in respect of the fractional shares.
The board believes that the consolidation will provide the company with greater flexibility for the continued development of business and the growth of the company, including financing arrangements. There is no change of business associated or being effected with respect of the consolidation.
Arcland will be obtaining a new set of Cusip and ISIN numbers as a result of the consolidation. The record date of the consolidation will be May 14, 2021. The effective date of the consolidation, and the new Cusip and ISIN numbers will be disclosed in a subsequent news release. Notwithstanding the foregoing, the consolidation is subject to regulatory approval, and the board may, at its discretion, determine to amend the terms or to not move forward with the consolidation.
Financing and debt settlement
Arcland is pleased to announce a non-brokered equity financing of up to $500,000 at a postconsolidation price of five cents per common share. The company also intends to settle up to $100,000 of indebtedness owed to China Blue Capital Group, a Cayman Islands company owned and controlled by Xiufen (Jane) Liu, who is an insider of the company by virtue of owning 36.8 per cent of the issued and outstanding common shares of the company by issuing common shares at a postconsolidation price of five cents per common share.
There will be no commissions or finders' fees paid in respect of the financing or debt settlement. The company intends to use the net proceeds of the financing for working capital and general corporate purposes. Any common shares issued under the financing or debt settlement will be subject to a four-month hold period from the date of issuance. The financing and debt settlement are subject to regulatory approval, including approval of the TSX Venture Exchange.
Subject to regulatory approval, the participation of Arcland's directors and officers, insiders such as China Blue, and other related parties in the financing and debt settlement would be considered a related-party transaction pursuant to Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions). The company is exempt from the requirements to obtain formal valuation and minority shareholder approval in connection with the insiders' participation in the financing and debt settlement in reliance, respectively, on Section 5.5(b) of MI 61-101 as the company is not listed on a specified market and on Section 5.7(1)(b) of MI 61-101 as a distribution of securities for cash not exceeding $2.5-million which is approved by independent directors. Neither the financing, nor the debt settlement is expected to result in the creation of a new control person of the company. To the company's knowledge, there is no material information concerning the company or its securities that has not been generally disclosed.
Appointment of Edward Posey as the new chief executive officer and director
The company is pleased to further announce the appointment of Edward Posey as the new chief executive officer and as an additional director of Arcland appointed pursuant to a board of directors meeting held today, succeeding Yan Zhang as the outgoing chief executive officer of the company. Mr. Posey has extensive experience in the mining industry as past president and director of Lundin Mining Corp. (1998 to 2005), past president and chief executive officer and director of Sirocco Mining Inc. (formerly Atacama Minerals Corp.) (2005 to 2009), and former president of Cortex Mining & Exploration Company. Mr. Posey is a professional mining geophysicist.
In addition to continuing as chief financial officer and a director of the company, Mr. Lian has also been appointed to hold the position of corporate secretary.
Completion of the consolidation is subject to a number of conditions, including, but not limited to, TSX Venture Exchange acceptance. There can be no assurance that the consolidation will be completed as proposed or at all.
We seek Safe Harbor.
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