Halifax, Nova Scotia–(Newsfile Corp. – August 23, 2021) – Battery Road Capital Corp., (TSXV: BTRY.P) (“Battery Road” or the “Corporation“), a capital pool company pursuant to Policy 2.4 of the TSX Venture Exchange (the “TSXV“), is providing this status update relating to the Qualifying Transaction of the Corporation with E-Tech Kalapuse Mining (Pty) Ltd. (“E-Tech Namibia“).

Closing of Private Placement

As of June 8, 2021 Battery Road has closed its brokered private placement financing (the “Offering“) previously announced in a press release dated June 1, 2021. The Offering consisted of gross proceeds of $5,000,000 raised through the issuance of 20,000,000 subscription receipts (“Subscription Receipts“) at a price of $0.25, each convertible into one post-split common share of Battery Road (“Shares“), subject to adjustment if the anticipated stock split (the “Split“) contemplated as part of the Qualifying Transaction, also previously announced in the press release dated June 1, 2021, does not occur.

The Subscription Receipts and the Shares issuable in exchange for the Subscription Receipts are subject to a four-month statutory hold period expiring October 9, 2021.

The proceeds of the Offering will be used after completion of the Qualifying Transaction to facilitate exploration activities at the Eureka neodymium and praseodymium project, located in central west Namibia, and for general working capital purposes.

The gross proceeds raised in connection with the Offering (the “Escrowed Funds“) have been deposited into escrow pursuant to the terms of a subscription receipt agreement among Computershare Trust Company of Canada (the “Escrow Agent“) and the Corporation dated June 8, 2021 and shall be released to Battery Road upon receipt by the Escrow Agent of joint notice of Battery Road and E-Tech Namibia stating that the Qualifying Transaction has closed, at which time each Subscription Receipt shall automatically be exchanged for Shares with no further consideration payable.

If the Qualifying Transaction is not completed by 5:00 p.m. (Halifax time) on December 31, 2021 or such later date as Battery Road and the Escrow Agent may agree in writing or if, prior to such time, Battery Road advises the Agent in writing or announces to the public that it does not intend to satisfy the escrow release conditions outlined in the Subscription Receipt Agreement, and unless the requisite approval is obtained, all of the issued and outstanding Subscription Receipts will be cancelled and the Escrow Agent will return to each holder of Subscription Receipts, an amount equal to the subscription price for the Subscription Receipts held by such holder plus a pro rata share of any interest or other income earned on the Escrowed Funds (less applicable withholding tax, if any).

In connection with the Offering, Numus Capital Corp. (the “Agent“) in its capacity as agent, will receive, conditional upon closing of the Qualifying Transaction: (a) a cash commission equal to $350,000 (being 7.0% of the aggregate gross proceeds raised by Battery Road from the sale of the Subscription Receipts in connection with the Offering); and (b) convertible compensation warrants entitling the Agent to purchase 1,400,000 Post-Split Shares in Battery Road (being equal to seven percent (7%) of the Subscription Receipts in the Offering), with conversion terms adjusted if the Split does not occur. This is expected to equate to 1,400,000 Post-Split Shares after exercise of the warrants. The compensation warrants are non-transferable, and may be exercised for a period of 24 months after the closing of the Qualifying Transaction at a price of $0.25 each.

Certain subscribers in the Offering are related parties or insiders to Battery Road:

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Notes:
(1) Officer of Battery Road Capital Corp.
(2) Controlled by Daniel Whittaker, Director of Battery Road Capital Corp.
(3) Related party to Battery Road Capital Corp.
(4) Director of Resulting Issuer after Qualifying Transaction
(5) Presumes conversion of subscription receipts into common shares of Battery Road on a post-split basis.
(6) Percentages based on presumed outstanding capital post Qualifying Transaction of 82,971,530 common shares

Participation of related parties in the Offering, including future directors of the resulting issuer on closing of the Qualifying Transaction totaled $607,500 and falls below the threshold for shareholder approval under applicable securities laws. Battery Road is relying upon an exemption for shareholder approval under section 5.7(1)(b) of MI 61-101 on the basis that the fair market value of the securities purchased by interested parties to the Offering is not more than $2,500,000 and the Offering has been approved by the independent director of Battery Road.

Closing of the Qualifying Transaction is subject to the satisfaction of customary closing conditions for a transaction of such nature, including approval of the TSXV and the receipt of approval of the disinterested shareholders of the Company of the fees in connection with the Offering owing to the Agent, which is a related party to the Corporation. The special meeting of shareholders of the Corporation to consider the disinterested shareholder approval of the fees owing to the Agent in relation to the Offering, and approving other aspects relating to the Qualifying Transaction will be scheduled at a future date.

Extension Agreement

The parties to the previously announced share exchange agreement dated as of October 10, 2020 among the Corporation, E-Tech Namibia, and the holders of all its outstanding shares, have entered into an extension agreement dated July 13, 2021 increasing the amount of time parties have to complete the Qualifying Transaction to December 31, 2021.

About Battery Road Capital Corp.

Battery Road is a Capital Pool Company listed on the TSX Venture Exchange. Its principal business is the identification and evaluation of assets or businesses with a view to completing a qualifying transaction. Battery Road has not commenced commercial operations and has no assets other than cash.

For further information please contact:

Jim Megann, Director
Battery Road Capital Corp.
902-442-7192

Completion of the Qualifying Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable pursuant to TSXV requirements, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Qualifying Transaction, any information released or received with respect to the Qualifying Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative The TSXV has in no way passed upon the merits of the proposed Qualifying Transaction and has neither approved nor disapproved the contents of this news release. Neither the TSXV nor its Regulation Service Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

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Forward-Looking Statements

This press release contains forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Battery Road to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

Examples of such statements include the intention to complete the Qualifying Transaction; release of the Offering proceeds from escrow to the Corporation; and, the Split. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this press release. Such forward-looking statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to: satisfying conditions under the agreements forming part of the Qualifying Transaction; satisfying the requirements of the TSXV with respect to proposed Qualifying Transaction; consumer interest in Battery Road’s services and products; competition; and anticipated and unanticipated costs. While Battery Road anticipates that subsequent events and developments may cause its views to change, Battery Road specifically disclaims any obligation to update these forward-looking statements. These forward-looking statements should not be relied upon as representing Battery Road’s views as of any date subsequent to the date of this press release. Although Battery Road has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The factors identified above are not intended to represent a complete list of the factors that could affect Battery Road. Additional factors are noted under “Risk Factors” in Battery Road’s initial public offering prospectus dated August 10, 2018, a copy of which may be obtained on the SEDAR website at www.sedar.com.

Completion of the Qualifying Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable, disinterested shareholder approval. Where applicable, the Qualifying Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Qualifying Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a Capital Pool Company should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

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To view the source version of this press release, please visit https://www.newsfilecorp.com/release/94084