AAJ Capital (AAAJ.P-V) Letter Of Intent For Proposed Qualifying Transaction
Nov 2nd 2022 - NR
AAJ Capital 3 Corp. has entered into a non-binding letter of intent dated Oct. 27, 2022, for the acquisition of Iron Bull Mining Inc., an arm's-length mining exploration company with mineral projects in Spain and Namibia. It is expected that, upon completion of the transaction, the combined entity will meet the listing requirements of a Tier 2 mining issuer under the policies of the TSX Venture Exchange. The transaction is an arm's-length transaction under the policies of the exchange.
AAJ Capital is a capital pool company and the transaction is intended to constitute the company's qualifying transaction under Policy 2.4 of the exchange. The letter of intent was negotiated at arm's length and the transaction is not expected to be subject to the approval of AAJ Capital shareholders.
The shares of AAJ Capital are currently halted for trading on the exchange as a result of the pending transaction and so will be reinstated for trading in due course.
Terms of the transaction
Pursuant to the terms of the letter of intent, AAJ Capital intends to acquire all of the issued and outstanding shares of Iron Bull by way of a three-cornered amalgamation, share purchase, share exchange or similar transaction, pursuant to which the former holders of Iron Bull shares would receive one common share of the resulting issuer (on a postconsolidation one-for-four basis) in exchange for every one Iron Bull share held. Immediately following the closing of the transaction, Mineworx Technologies Ltd., a public Alberta company whose shares are listed on the exchange, intends to distribute approximately 17,358,929 of the 20 million Iron Bull shares that it currently holds to its shareholders by way of a return of capital. Following the closing of the transaction, the current shareholders of Iron Bull (excluding those shares distributed to the shareholders of Mineworx) would hold approximately 66 per cent of the issued and outstanding shares of the resulting issuer on a posttransaction and non-diluted basis. The resulting issuer shares to be issued to the shareholders of Iron Bull may be subject to escrow restrictions imposed by the exchange.
Prior to or concurrently with closing, the company is also required to complete a consolidation of its currently issued and outstanding shares on the basis of four current common shares for one postconsolidation common share. In connection with the transaction, the company will change its name to a name acceptable to Iron Bull and applicable regulatory authorities.
In addition to customary conditions respecting sponsorship, regulatory and shareholder approvals, and due diligence, the closing of the transaction is subject to execution of a definitive agreement and completion of the consolidation and the name change. There can be no assurance that the transaction will be completed as proposed or at all.
Board and management of the resulting issuer
Following completion of the transaction and subject to requirements of the exchange, the board of directors of the resulting issuer will comprise five nominees of Iron Bull.
Sponsorship
Sponsorship of a qualifying transaction of a capital pool company is required by the exchange unless exempt in accordance with exchange policies. AAJ Capital intends to apply for an exemption from the sponsorship requirements; however, there is no assurance that it will be able to obtain this exemption.
Significant conditions to completion of the proposed transaction
Closing of the transaction is required to occur by Feb. 28, 2023, subject to extension upon mutual agreement of the parties. Completion of the qualifying transaction is subject to a number of additional conditions, including but not limited to: (a) closing conditions customary to transactions of the nature of the transaction; (b) approvals of all regulatory bodies having jurisdiction in connection with the qualifying transaction; and (c) exchange regulatory approval. There can be no assurance that the qualifying transaction will be completed as proposed or at all.
Other information and updates
The shares of AAJ Capital are currently listed for trading on the exchange. However, in accordance with exchange policy, the company's shares are currently halted from trading and will remain halted until such time as determined by the exchange, which, depending on the policies of the exchange, may not occur until the completion of the transaction.
If and when a definitive agreement is executed, AAJ Capital will issue a subsequent press release in accordance with the policies of the exchange containing details of the definitive agreement and additional terms of the transaction, including information relating to sponsorship, summary financial information in respect of Iron Bull, the history of Iron Bull and the proposed directors, officers, and insiders of the resulting issuer upon completion of the transaction.
About AAJ Capital 3 Corp.
AAJ Capital has not commenced commercial operations. The only business of AAJ Capital is the identification and evaluation of assets or businesses with a view to completing a qualifying transaction in accordance with TSX-V Policy 2.4, Capital Pool Companies.
For further information regarding the Company, the Offering, and the Company’s management team, please contact Praveen Varshney at 604-684-2181 and see the Prospectus filed with the Company’s disclosure documents on SEDAR at www.sedar.com.
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