TSX: SBR Last:
Silver
These transactions have been negotiated on an
arm's-length basis and unanimously approved by the Company's independent
directors. It is the view of the Company's management and directors
that these transactions will provide Silver Bear with additional
financing to bridge ordinary course liabilities as they become due and
defer payment of certain principal amounts in order to allow the Company
to maintain its development activities at the
Silver Bear's CEO,
Details of the Transactions
Aterra, Inflection and Silver Bear have agreed to:
(i) amend the terms of certain non-convertible promissory notes issued
by the Company to the Investors on
Non-Convertible Note Extension
The Company and the Investors have extended the maturity date of the
The Company has obtained
Note Restructuring and Additional Financing
Inflection has agreed to exchange certain unsecured
contingent convertible promissory notes of the Company in the principal
amounts of
As part of the Additional Financing, each of
Inflection and Aterra agreed to make additional loans to the Company in
the principal amounts of
All of these outstanding New Consolidated Contingent
Convertible Notes were then consolidated for each of the Investors, with
Inflection ultimately being issued a single New Consolidated Contingent
Convertible Note in the principal amount of
The Company has obtained TSX conditional approval for the Additional Financing, which is subject to, among other things, receipt of the Note Exchange Shareholder Approvals.
Additional Convertible Note Financing by Inflection
Inflection also agreed to make an additional loan to the Company in the principal amount of
The Company has obtained TSX conditional approval for
the 2016 Contingent Financing, which is subject to, among other things,
receipt of the 2016 Contingent Financing Approvals. The TSX has also
conditionally approved the issuance of the New Consolidated Contingent
Convertible Notes on
These transactions have all been conducted on a non-brokered basis. No fee is payable by the Company in respect of the issuance of securities in connection with these transactions.
Shareholder Approvals
The Company has called a special meeting of shareholders for
Approval of Conversion and Interest Features of New Consolidated Contingent Convertible Notes
The New Consolidated Contingent Convertible Notes pay no interest are not convertible into common shares until such time as the Company obtains the Note Exchange Shareholder Approvals, being minority and disinterested shareholder approval (as required by Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("MI 61-101") and under the TSX Company Manual) for the payment of interest thereon and conversion of the New Consolidated Contingent Convertible Notes into common shares.
Accordingly, the Company will be seeking the Note
Exchange Shareholder Approvals at the Meeting, and if they are obtained,
the New Consolidated Contingent Convertible Notes will bear interest at
a rate of 15% per annum and be convertible into common shares at an
exercise price of
Both Inflection and Aterra are insiders and related parties of the Company. Mr.
Approval of 2016 Contingent Financing
Since Inflection is an insider of the Company, the issuance of the 2016 Inflection Promissory Note requires the Company to obtain the 2016 Contingent Financing Approvals, being minority and disinterested shareholder approval (as required by MI 61-101 and under the TSX Company Manual) for the issuance of the 2016 Inflection Promissory Note to Inflection. The issuance of the 2016 Inflection Promissory Note is also considered a "related party" transaction pursuant to MI 61-101. The Company is relying on the exemption available under Section 5.5(c) of MI 61-101 from the formal valuation requirements. The 2016 Inflection Promissory Note was unanimously approved by the board of directors of the Company with Mr. Sotskov abstaining from participating in the vote. Accordingly, at the Meeting, the Company will be seeking the 2016 Contingent Financing Approvals.
Resulting Share Ownership
The following table sets out the maximum number of common shares issuable to each of Inflection and Aterra in connection with the proposed transactions, on a non-diluted basis, using the 161,327,017 common shares issued and outstanding as of the date hereof, and assuming no interest under any instrument is converted to common shares.
| Number and Percent (non-diluted) of Common Shares (1)(2) | |||||
| Name of Insider | Share Ownership at date of Press Release | Common Shares Issuable upon conversion of the New Consolidated Contingent Convertible Notes (3) |
Ownership Following Conversion of New Consolidated Contingent Convertible Notes (non-diluted) (4) |
||
| Inflection | 41,176,471 common shares (25.5% - basic) |
274,461,552 common shares or 170.12% of the currently issued and outstanding common shares | 315,638,023 common shares or 56.18% of the then issued and outstanding common shares | ||
| Aterra | 40,468,579 common shares (25.08% - basic) |
125,995,707 common shares or 78.10% of the currently issued and outstanding common shares | 166,464,286 common shares or 29.63% of the then issued and outstanding common shares |
||
| (1) | Assumes no payment of common shares in lieu of interest. The maximum number of common shares that could be issued in lieu of interest on the New Consolidated Contingent Convertible Notes is 64,676,589. |
| (2) | The 2016 Inflection Promissory Note is a non-convertible promissory note and no common shares are issuable in respect thereof. |
| (3) | Assumes conversion at C$0.045 per share. |
| (4) | Assumes all instruments are actually converted. If so, 561,784,276 common shares would then be issued and outstanding on a non-diluted basis (and assuming no exercise of warrants). |
About Silver Bear
Cautionary Notes
This release and subsequent oral statements made by and on behalf of the Company may contain forward-looking statements, which reflect management's expectations. Wherever possible, words such as "intends", "expects", "scheduled", "estimates", "anticipates", "believes" and similar expressions or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, have been used to identify these forward-looking statements. Although the forward-looking statements contained in this release reflect management's current beliefs based upon information currently available to management and based upon what management believes to be reasonable assumptions, Silver Bear cannot be certain that actual results will be consistent with these forward-looking statements. A number of factors could cause events and achievements to differ materially from the results expressed or implied in the forward-looking statements. Such risk factors include, but are not limited, to the possibility that necessary regulatory approvals are not received or other conditions to completion of the Transactions are not satisfied, the possibility that we have to allocate proceeds to other uses or reallocate proceeds significantly differently among the anticipated uses, and to risk factors identified by Silver Bear in its continuous disclosure filings filed from time to time on SEDAR. These factors should be considered carefully and prospective investors should not place undue reliance on the forward-looking statements. Forward-looking statements necessarily involve significant known and unknown risks, assumptions and uncertainties that may cause Silver Bear's actual results, events, prospects and opportunities to differ materially from those expressed or implied by such forward-looking statements. Although Silver Bear has attempted to identify important risks and factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors and risks 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, prospective investors should not place undue reliance on forward-looking statements. These forward-looking statements are made as of the date of this release, and Silver Bear assumes no obligation to update or revise them to reflect new events or circumstances, unless otherwise required by law.
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