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Oceanic Announces Completion of Non-Brokered Convertible Debenture Financing

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Oceanic Iron Ore Corp. (TSX-V: FEO) is pleased to announce the completion of a non-brokered financing in an aggregate amount of $1,557,548.

 

The subscribers to the Financing were issued Series C convertible debentures which will earn interest at a rate of 8.5% per annum over a 60-month term, payable quarterly.

 

The principal amount of the Debentures will be convertible to Units during the Term at the election of the subscriber at a price of $0.19 per Unit.  Each Unit will consist of 1 common share of the Company and 1 share purchase warrant of the Company, with each whole warrant entitling the holder to purchase one common share of the Company at a price of $0.19 per common share until March 10, 2026.

 

The Debentures will be secured with a first ranking charge against the assets of the Company, ranking pari-passu with all other secured debenture holders.

 

The Debentures and any Units acquired on conversion thereof are subject to a hold period expiring on July 10, 2021.  No finder’s fees were paid in connection with the Financing.

 

The Company intends to use the proceeds of the Financing for ongoing negotiations with potential strategic partners, general claims maintenance, and corporate and working capital purposes.

 

Insiders of the Company were issued Debentures with a principal amount in aggregate of $1,355,358, and, accordingly, the private placement is a “related party transaction” within the meaning of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions.  The issuance of Debentures to insiders is exempt from the valuation requirements and the minority approval requirements of MI 61-101 by virtue of the exemptions in sections 5.5(a) and 5.7(a) of MI 61-101, since the fair market value of the consideration for the Debentures issued to insiders did not exceed 25% of the Company’s market capitalization.

 

Early Warning Disclosure – Steven Dean

 

Pursuant to the Financing, Sirocco Advisory Services Ltd., a corporation owned and controlled by Steven Dean, acquired a Debenture in the principal amount of $375,250. The Debenture is convertible into 1,975,000 Units of the Company of a price of $0.19 per unit until March 10, 2026. Each unit will consist of one common share of the Company and one warrant, each warrant entitling the holder to purchase one common share of the Company at a price of $0.19 per share from the date of issuance until March 10, 2026.

 

Prior to acquiring the Debenture, the Mr. Dean held, directly and indirectly, or had control or direction over, over an aggregate of 4,265,403 common shares of the Company representing approximately 4.5% of the issued and outstanding common shares of the Company, 2,300,000 warrants of the Company, 3,141,700 stock options of the Company, restricted share units convertible into 133,334 common shares of the Company and a Series A Debenture in the principal amount of $33,000 convertible into 330,000 units of the Company, each unit consisting of one common share and one warrant of the Company.

 

Mr. Dean would have held, directly and indirectly, or had control or direction over, an aggregate of 10,500,437 common shares of the Company, representing approximately 10.5% of the issued and outstanding shares on a partially diluted basis assuming the exercise of warrants and stock options, conversion of restricted share units, conversion of the Series A Debenture and exercise of the underlying warrants.

 

Following acquisition of the Debenture, Mr. Dean holds, directly and indirectly, or has control or direction over, an aggregate of 4,265,403 common shares of the Company, representing approximately 4.5% of the issued and outstanding common shares of the Company, 2,300,000 warrants of the Company, 3,141,700 stock options of the Company, restricted share units convertible into 133,334 common shares of the Company, a Series A Debenture in the principal amount of $33,000 convertible into 330,000 units of the Company, each unit consisting of one common share and one warrant of the Company, and the Debenture convertible into 1,975,000 Units of the Company, each unit consisting of one common share of the Company and one warrant, each warrant entitling the holder to purchase one common share of the Company.

 

Mr. Dean would hold 14,450,437 common shares of the Company, representing approximately 13.9% of the issued and outstanding common shares on a partially diluted basis assuming the exercise of warrants and the stock options, conversion of restricted share units, conversion of the Series A Debenture and exercise of the underlying warrants and conversion of the Debenture and exercise of the underlying warrants.

 

The Company has been advised that Mr. Dean acquired the securities for investment purposes and may in the future acquire or dispose of additional securities of the Company through the market, privately, or otherwise, as circumstances or market conditions warrant.

 

Posted March 11, 2021

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