Mr. Eric Finlayson reports
KAIZEN DISCOVERY CLOSES NON-BROKERED PRIVATE PLACEMENT
Kaizen Discovery Inc. has completed its previously announced non-brokered private placement (refer to Kaizen's news release dated Dec. 4, 2020).
In connection with the closing of the offering, the company has issued an aggregate of 26.3 million units of the company at a price of five cents per unit for gross proceeds of $1,315,000. Each unit consists of one common share of the company and one common share purchase warrant. Each warrant entitles the holder, on exercise, to purchase one share for a period of 24 months following the closing date of the offering at the exercise price of 7.5 cents per share.
Kaizen's majority shareholder, HPX TechCo Inc., has subscribed for 26 million units and, as of closing, has increased its ownership to 73.2 per cent of the company's shares outstanding.
Net proceeds from the offering will be used at Kaizen's 100-per-cent-owned Pinaya copper-gold project in Peru and for general administrative expenses.
In connection with subscriptions received in the offering, the company expects to pay aggregate finders' fees of $900. The units are being offered pursuant to exemptions from the prospectus requirements. The securities underlying the units will be subject to a four-month-and-one-day hold period expiring on April 16, 2021. The offering remains subject to the final approval of the TSX Venture Exchange.
The lead order by HPX constitutes a related party transaction under Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions (MI 61-101) as HPX is a related party of Kaizen given its greater-than-10-per-cent beneficial shareholding. Pursuant to sections 5.5(a) and 5.7(1)(a) of MI 61-101, the company is exempt from obtaining a formal valuation and minority approval of the company's shareholders in respect of the offering due to the fair market value of the lead order being below 25 per cent of the company's market capitalization for purposes of MI 61-101. The company will file a material change report in respect of the offering. However, the material change report will be filed less than 21 days prior to the closing of the offering, which is consistent with market practice and the company deems reasonable in the circumstances.
About Kaizen Discovery Inc.
Kaizen is a Canadian mineral exploration and development company with exploration projects in Peru and Canada.
We seek Safe Harbor.
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