Vancouver, British Columbia--(Newsfile Corp. - February 12, 2020) - Rain Resources Corp. ("Rain" or the "Company") is pleased to announce that it has entered into an acquisition agreement and an amalgamation agreement (collectively, the "Agreements") with Ridge Royalty Corp. ("Ridge") pursuant to which Rain and Ridge will complete a "three-cornered amalgamation", with Ridge amalgamating with Rain's wholly-owned subsidiary that was recently formed for this transaction (the "Transaction").
About Ridge Royalty Corp.
Ridge Royalty Corp. is a natural resource project generator. Ridge focuses on the technical merits of projects generated through claim staking or transactions to acquire underappreciated projects of scale. Ridge seeks partners to advance its projects through joint-ventures, option agreements and asset sales. Ridge generally receives an equity and cash payment for the assets it is selling and retains a royalty to participate in the long-term value creation. Ridge is Canadian focused but will look at other jurisdictions if there is an enticing opportunity. Ridge currently has investments in the mining and energy sector.
About Rain Resources Corp.
Rain Resources Corp. is focused on creating shareholder value through acquisition of prospective and underexplored properties, discoveries and strategic development of mineral properties domestically and internationally.
The Transaction is expected to proceed by way of a "three-cornered amalgamation" under which a wholly-owned subsidiary of Rain will amalgamate with Ridge pursuant to the Business Corporations Act (British Columbia). Under the Transaction, shareholders of Ridge will receive an aggregate of 26,485,071 common shares of Rain at a deemed price of $0.20 per share, representing aggregate consideration of approximately $5,300,000 for their Ridge shares. The Transaction is subject to completion of certain conditions precedent, including without limitation: completion by Rain of a private placement financing (the "Private Placement") for gross proceeds of no less than $2,000,000 and no more than $5,000,000; completion by Rain of a 2:1 share consolidation; and receipt of required shareholder approvals.
Under the Private Placement, Rain will raise gross proceeds of no less than $2,000,000 and no more than $5,000,000 through the issuance of units (each, a "Unit") at a price of $0.20 per Unit, with each Unit comprised of one common share and one-half of a common share purchase warrant. Each whole warrant will be exercisable for a Rain common share at an exercise price of $0.30 for two years from the date of issuance.
In conjunction with the closing of the Transaction, Rain will change its name to "Cloudbreak Capital Ltd.", or such similar name as is agreed to by the parties (the "Resulting Issuer"). On closing of the Transaction, and assuming that, Rain raises the minimum of $2,000,000 under the Private Placement at a price of $0.20 per Unit, the Resulting Issuer will have an aggregate of 41,596,346 common shares issued and outstanding. The current shareholders of Rain would hold approximately 12.29% of the shares of the Resulting Issuer, participants in the Private Placement would hold approximately 24.04% of the shares of the Resulting Issuer, and the current shareholders of the Target would hold approximately 63.67% of the shares of the Resulting Issuer.
On Behalf of the Board of Directors
Chief Executive Officer
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein in the United States. The securities described herein have not been registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities law and may not be offered or sold in the "United States", as such term is defined in Regulation S promulgated under the U.S. Securities Act, unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration requirements is available.
Certain statements in this news release are forward-looking statements, including with respect to the Transaction, the Private Placement, future plans, and other matters. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Such information can generally be identified by the use of forwarding-looking wording such as "may", "expect", "estimate", "anticipate", "intend", "believe" and "continue" or the negative thereof or similar variations. The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company, including but not limited to, business, economic and capital market conditions, the ability to manage operating expenses, and dependence on key personnel. Such statements and information are based on numerous assumptions regarding present and future business strategies and the environment in which the Company or the Resulting Issuer will operate in the future, anticipated costs, and the ability to achieve goals. Factors that could cause the actual results to differ materially from those in forward-looking statements include, the continued availability of capital and financing, litigation, failure of counterparties to perform their contractual obligations, loss of key employees and consultants, and general economic, market or business conditions. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement. The reader is cautioned not to place undue reliance on any forward-looking information.
The forward-looking statements contained in this news release are made as of the date of this news release. Except as required by law, the Company disclaims any intention and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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